Global direct selling community has witnessed a number of notable company merger and acquisition attempts from within and outside of the industry. Some of these attempts were successful in finalizing the deal. In some other cases, a deal was not reached between the parties.
We will review a group of these real-life stories that stand out among others, in a two-part series.
Amway and Nutrilite
Dr. Carl Rehnborg’s Nutrilite is known as the first company that utilized the principles of multi-level marketing. Nutrilite provided its distributors with the products and paid commissions not only on personally sold items, but also on sales made by distributors in their teams.
Amway’s founders Rich DeVos and Jay Van Andel joined Nutrilite in 1949 as distributors. By 1958, the two partners’ organization at Nutrilite reached 5,000 people.
A year after this in 1959, the two friends started selling the famous “L.O.C” within “Amway”. They adapted the principles of multi level marketing that they had worked with at Nutrilite.
Amway bought 51% of Nutrilite in 1972. And in 1994, it took over completely. This acquisition has given a substantial boost to the company’s business. In 2022, Amway’s Nutrilite line generated more than 50% company’s global sales of $8.1 billion.
Avon on Amway’s and Mary Kay’s Targets
The year of 1989 will be remembered by the offers made to acquire Avon by two of its rivals, Mary Kay and Amway.
That year, Amway made an offer worth of $2.1 billion to buy Avon. Amway had actually indicated its interest in Avon before that, and stated that it already owned 10.3% of the company through a partnership. Amway’s COO said in an interview that such a merger would give both companies economies of scale and would also open Avon’s foreign markets to Amway, particularly in Latin America. Avon rejected this offer and told Amway “The Avon board had unanimously rejected the offer because it was not in the best interests of the company or its shareholders.” After a few days, Amway withdrew its offer.
Following this, Avon remained in the takeover spotlight. This time, the interested party was Mary Kay. Mary Kay was considerably smaller at the time with an annual sales of $400 million as compared to Avon’s $3 billion. In late May 1989, Avon turned down the offer stating exactly this situation, and said, “It did not want to be acquired by the much smaller Mary Kay Cosmetics.”
However, Mary Kay was determined to accomplish a takeover. It joined forces with other investors, started collecting Avon shares, and reached owning 16% of the company. Avon then, taking this to court, blocked the coalition from purchasing more stock. Mary Kay announced that it was withdrawing from the association in 1991.
Groupe Roche: The French Powerhouse’s Acquisitions
This company was founded in 1959 by Yves Rocher as a beauty and personal care products business. In November 1997, Yves Rocher acquired Stanhome’s direct selling operations in Venezuela, Mexico, Colombia, Spain, France and Italy for $68 million. Stanhome’s direct selling business was generating $225 million sales annually, the company said. Yves Rocher was making $1.2 billion sales at that time.
About 20 years after this in 2018, Groupe Rocher bought Arbonne. Arbonne was founded in 1975 and during the time of this transaction, it had a global business with a sales revenue in excess of $550 million, about 800 employees and over 250,000 active independent consultants.
Warren Buffett Enters Direct Selling
No need to introduce Warren Buffett… In September 2002, Warren Buffett’s company 
Berkshire Hathaway announced it would acquire Pampered Chef from its founder and Chairman, Doris Christopher and her family. At the time, Pampered Chef had become a $740 million company. Its growth between the 1995-2001 period was 232%.
In 2014, Warren Buffett appointed his protégé Tracy Britt Cool as Pampered Chef’s CEO. She led the company until July 2020 only to quit to take a stake in another direct sales company, Thirty-One Gifts.
Europe’s Household Appliances Giant Jumps into Cosmetics
Vorwerk was founded in 1883 in Germany. Until the end of the 1960s, company’s focus was mainly on the production and sale of vacuum cleaners, carpets and upholstery fabrics. Since then, it has continually diversified.
Consequently in May 2004, we saw Vorwerk acquiring the American cosmetics direct seller Jafra. The company was founded in 1956 by Jan and Frank Day. Jafra’s sales was $383 million in 2003 with 440,000 independent consultants. At the time, a fund named Clayton, Dubilier & Rice owned about 85% of shares. This fund had tried to sell Jafra to Avon first, but that attempt was unsuccessful.
In 2022, Vorwerk sold Jafra to Betterware de Mexico. We will cover that story in the next part.
Tupperware Buys Sara Lee
Tupperware, best known for its food-storage containers and its recent financial struggle to survive, had made $1.2 billion sales in 2004. In August 2005, it announced that it was buying Sara Lee’s direct selling business for $557 million in cash, in an effort to further expand the company’s beauty unit.
As reported by Tupperware, Sara Lee had annual sales of about $470 million, selling beauty and personal care products, mostly in Latin America and Asia. Sara Lee’s direct selling operations included entities like Avroy Shlain, House of Fuller, Nutrimetics and Nuvo Cosmeticos. As a part of the deal, Simon Hemus, the group president of the Sara Lee’s direct selling unit, would also join Tupperware as the group president of international beauty and personal care.
In 2021, Tupperware sold its Avroy Shlain and House of Fuller units.
Next week, we will be reviewing another interesting group of M&A attempts, all from the direct sales industry.
…..
Hakki Ozmorali is the Founder of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki Ozmorali is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
SHARE THIS ARTICLE:
Nice review of acquisitions. I read them backward (part 2 first), but enjoyed your article very much.
Thank you, Robin! Glad you enjoyed.