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MarketScreener Homepage  >  Equities  >  Bolsa de Valores de Sao Paulo  >  Natura &Co Holding S.A.    NTCO3   BRNTCOACNOR5

NATURA &CO HOLDING S.A.

(NTCO3)
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Sec Filing: Preliminary prospectus supplement

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10/01/2020 | 05:50pm EDT

filed with the

to buy these

registration statement

not soliciting an offer

The information in this prospectus supplement is not complete and may be changed. We may not sell these securities until the

Securities and Exchange Commission is effective. This prospectus supplement is not an offer to sell these securities and is securities in any state where the offer or sale is not permitted.

Subject to Completion, dated October 1, 2020.

Preliminary prospectus supplement (To prospectus dated October 1, 2020)

121,400,000 Common Shares

Natura &Co Holding S.A.

(Incorporated in the Federative Republic of Brazil)

We are offering common shares in a global offering, which consists of an international offering in the

United States and other countries outside the Federative Republic of Brazil, or Brazil, and a concurrent offering in Brazil. In the aggregate, 121,400,000 new common shares, which may be represented by American Depositary Shares, or the ADSs, are being offered by us in the global offering. Each ADS represents two common shares. The offering of the ADSs is being underwritten by the international underwriters named in this prospectus supplement. The common shares purchased by investors outside Brazil will be settled in Brazil and paid for in reais, and underwritten by the Brazilian placement agents named elsewhere is this prospectus supplement. The closings of the international and Brazilian offerings are conditioned upon each other.

Holders of our common shares as of September 29, 2020 will be given the opportunity to subscribe for common shares in the Brazilian offering on a priority basis at the public offering price. The priority subscription procedure is not being made available to holders of ADSs. An ADS holder that wishes to be eligible for priority subscription will be required to make the necessary arrangements to cancel such holder's ADSs and take delivery of the underlying common shares in a Brazilian account. See "The Offering-Priority subscription."

ADSs representing our common shares are listed on the New York Stock Exchange, or NYSE, under the symbol "NTCO." The closing price of the ADSs on the NYSE on September 30, 2020 was U.S.$18.21 per ADS. Our common shares are listed and trade on the Novo Mercado segment of the São Paulo Stock Exchange (B3 S.A.-Brasil, Bolsa, Balcão), or the B3, under the symbol "NTCO3." The closing price of the common shares on the B3 on September 30, 2020 was R$51.13 per share.

Investing in our common shares and ADSs involves risks. See "Risk Factors" beginning on page S-26 of this prospectus supplement.

Per common

Per ADS

share

Total(1)(2)(3)

Public offering price . . . . . . . . . . . . . . . . . . . . . . .

U.S.$

R$

U.S.$

Underwriting discounts and commissions . . . . . .

U.S.$

R$

U.S.$

Proceeds, before expenses, to us . . . . . . . . . . . . .

U.S.$

R$

U.S.$

(1) Amounts in reais have been translated into U.S. dollars at the selling exchange rate reported by the Central

Bank of Brazil (Banco Central do Brasil) as of

, 2020, or R$

to U.S.$1.00.

  1. Total amounts reflect the common shares (including shares represented by ADSs) offered pursuant to this prospectus supplement, and do not reflect other subscriptions occurring concurrently in the global offering.
  2. Total amounts reflect the sum of (i) the per-ADS price multiplied by the number of common shares being sold represented by ADSs plus (ii) the per common share price multiplied by the number of common shares

being sold directly converted to U.S. dollars based on the R$

per U.S.$1.00 exchange rate.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.

Delivery of the ADSs will be made through the book-entry facilities of The Depository Trust Company, or

DTC, on or about

, 2020. Delivery of our common shares will be made in Brazil through the book-entry

facilities of the B3 on or about

, 2020.

BofA Securities

Morgan Stanley

Bradesco BBI

Citigroup

Itaú BBA

The date of this prospectus supplement is

, 2020.

TABLE OF CONTENTS

Page

Certain Defined Terms and Conventions Used in This Prospectus Supplement . . . . . . . . . . . . . . . . . . . . .

S-iii

About This Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-vi

Presentation of Financial and Certain Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-vii

Cautionary Statement Regarding Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-xi

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-1

The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-13

Summary Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-17

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-26

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-68

Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-70

Dividends and Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-72

Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-74

Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-76

Market Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-78

Selected Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-83

Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-90

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-95

Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-149

Principal Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-171

Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-176

Common Shares and ADSs Eligible for Future Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-178

Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-180

Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-188

Expenses of the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-200

Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-201

Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-202

Where You Can Find More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-203

Incorporation of Documents By Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-204

Prospectus

Certain Defined Terms and Conventions Used in This Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ii

About This Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Where You Can Find More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

Incorporation of Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

Natura &Co Holding S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

Description of Natura &Co Holding Shares and Natura &Co Holding By-Laws . . . . . . . . . . . . . . . . . . . . .

10

Description of American Depositary Shares and Deposit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24

Enforceability of Civil Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33

Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35

Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36

Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37

Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39

Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40

We have not authorized anyone to provide any information other than that contained in this prospectus supplement or in any free writing prospectus prepared by or on behalf of us or to which we may have referred

S-i

you. We do not take any responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we, nor any of the international underwriters or the Brazilian placement agents have authorized any other person to provide you with different or additional information. Neither we, nor the international underwriters nor the Brazilian placement agents are making an offer to sell the common shares or the ADSs in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere outside of Brazil solely on the basis of the information contained in this prospectus supplement. You should assume that the information appearing in this prospectus supplement is accurate only as of the date on the front cover of this prospectus supplement, regardless of the time of delivery of this prospectus supplement or any sale of the common shares or the ADSs. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus supplement.

For investors outside the United States: Neither we, nor any of the international underwriters nor Brazilian placement agents have done anything that would permit this offering or possession or distribution of this prospectus supplement in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus supplement must inform themselves about, and observe any restrictions relating to, the offering of our common shares and ADSs and the distribution of this prospectus supplement outside the United States.

We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. Other trademarks, service marks and trade names appearing in this prospectus supplement are the property of their respective owners.

Solely for convenience, some of the trademarks, service marks and trade names referred to in this prospectus supplement are listed without the ® and symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names.

Market and Industry Data

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations, market position, market size and growth rates of the markets in which we participate, is based on information from various sources, including Euromonitor International Limited, or "Euromonitor International," on our assumptions and calculations that we have made that are based on those data and other similar sources and on our knowledge of the markets for our products and services. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. Although we are not aware of any misstatements regarding the industry data that we present in this prospectus, our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under "Risk Factors," "Cautionary Statement Regarding Forward- Looking Statements" in this prospectus, "Management's Discussion and Analysis of Financial Condition and Results of Operations of Natura &Co" incorporated by reference into this prospectus from the Natura &Co Holding MD&A/Financials Form 6-K and "Management's Discussion and Analysis of Financial Condition and Results of Operations of Avon" incorporated by reference into this prospectus from the Avon MD&A/Financials Form 6-K.

Information in this prospectus on the beauty and personal care market is from independent market research carried out by Euromonitor International but should not be used be relied upon in making, or refraining from making, any investment decision.

Some market data and statistical information contained in this prospectus are also based on management's estimates and calculations, which are derived from our review and interpretation of the independent sources, our internal market and brand research and our knowledge of the beauty and personal care industry. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information.

S-ii

CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS PROSPECTUS SUPPLEMENT

All references in this prospectus supplement to the "Company," "we," "us" and "our" refer to Natura &Co, as defined below, unless the context otherwise requires. All references herein to the "real," "reais" or "R$" are to the Brazilian real, the official currency of Brazil. All references to "U.S. dollars," "dollars" or "U.S.$" are to United States dollars, the official currency of the United States. All references to "pounds," "pound sterling" or "£" are to the British pound sterling, the official currency of the United Kingdom.

In addition, as used in this prospectus supplement, the following defined terms have the following respective meanings:

"ABIHPEC" means the Brazilian Personal Hygiene, Perfumery and Cosmetics Association (Associação Brasileira da Indústria de Higiene Pessoal, Perfumaria e Cosméticos).

"ADSs" means American Depositary Shares, each representing two Natura &Co Holding Shares.

"Aesop" means Emeis Holding Pty Ltd and its consolidated subsidiaries.

"Avon" means Avon Products, Inc., a New York corporation, and its consolidated subsidiaries.

"Avon Shares" means shares of both Avon Common Shares and Avon Preferred Shares.

"Avon Common Shares" means the shares of common stock, par value U.S.$0.25 per share, of Avon.

"Avon Preferred Shares" means the shares of Series C Preferred Stock, par value U.S.$1.00 per share, of Avon.

"B3" means the B3 S.A.-Brasil,Bolsa, Balcão, or São Paulo Stock Exchange.

"BNDES" means the Banco Nacional de Desenvolvimento Econômico e Social, or the Brazilian National Economic and Social Development Bank.

"Brazil" means the Federative Republic of Brazil and the phrase "Brazilian government" refers to the federal government of Brazil.

"Brazilian Central Bank" means the Central Bank of Brazil (Banco Central do Brasil).

"Brazilian Corporation Law" means the Brazilian Law No. 6,404/76, as amended.

"CDI," or the Interbank Deposit Certificate (Certificado de Depósito Interbancário), means the "over extra group" daily average rate for interbank deposits, expressed as an annual percentage, based on 252 business days, calculated daily and published by B3, or any other index as may be further used in substitution thereof.

"CMN" means the Conselho Monetário Nacional, or the Brazilian Monetary Council.

"consultants" are independent sales representatives who, although they are not employed by Natura &Co, sell Natura &Co products to customers of Natura &Co.

"CVM" means the Comissão de Valores Mobiliários, or the Brazilian Securities Commission.

"DOJ" means the United States Department of Justice.

"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended.

S-iii

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