TPG acquires Avon Japan for $90m

The firm has agreed to purchase 74.67% of the JASDAQ-listed cosmetics vendor from parent Avon for $90m. It has offered to acquire the remaining 25.33% from shareholders.

Global private equity firm TPG Capital has agreed to buy 74.67 percent of Avon Japan for a total cash payment of ¥7.3 billion (€65.09 million; $90.35 million). The stake is being purchased from the Avon company, which is the largest shareholder in the JASDAQ-listed cosmetics company.

In addition, TPG has offered to pay shareholders ¥74 per share, the same price paid to Avon, for the remaining 25.33 percent of Avon Japan shares.

“We are pleased to conclude this agreement with TPG Capital as we further focus our investments on higher growth opportunities. While Japan is an important consumer market, our analysis indicates that we would need to commit significant additional investment in order to generate profitable growth in the near to intermediate term,” Andrea Jung, chairman and chief executive officer of Avon, said in the statement.

The transaction is expected to close by the end of the year, according to the statement.

Avon has over $10 billion in annual revenue across markets of more than 100 countries, but its Japanese operation accounts for less than 2 percent of the total company sales.

TPG’s most recent attempt to invest in Japan was with struggling national carrier Japan Airlines (JAL).

The firm joined forces with Oneworld Alliance Member American Airlines (AA) last November and offered to invest $1.1 billion in JAL – an offer that was upped to $1.4 billion in January this year in order to head off a rival bid from Star Alliance member Delta Airlines.

Later in June, JAL and AA applied for antitrust immunity from Japan’s Ministry of Land, Infrastructure, Transport and Tourism – a move which some read at the time as bringing the TPG deal one step closer. However, JAL has secured a ¥350 billion capital injection from Japanese government-backed Enterprise Turnaround Initiative Corporation, which was confirmed at the time the company’s restructuring plan was announced.

TPG’s other portfolio companies in Japan include Japan Telecom, toy maker Tomy Company and JCR Pharmaceuticals.