NEW YORK -- Private investment firm Cerberus Capital Management is taking a majority stake in Avon's North American division.
Avon's shares jumped nearly 25 percent in Thursday premarket trading.
Cerberus will get an 80.1 percent interest in Avon North America in exchange for a $170 million equity investment. The North American unit will be separated from Avon Products Inc. into a privately held company that will be managed by Cerberus.
Cerberus will also make a $435 million investment for a minority stake in Avon Products Inc.
Avon's board has approved the deal, which is expected to be completed in the spring. Avon will trim its board from 12 to 11 members.
The beauty products company also announced it is suspending its quarterly dividend, starting with in 2016's first quarter.