Prada reached an agreement of $ 1,375 billion to buy the smallest rival Versace of Capri Holdings on Thursday, including its debt, in a movement that unites two of the most important names in the Italian way.
Prada is trying to expand, after having challenged a deceleration in the luxury demand, while Versace has been operating with a loss in the last quarters.
The merger strengthens the hand of Italy in a luxury industry directed by French conglomerates, the largest is the owner of Louis Vuitton LVMH.
The agreement follows the announcement on March 13 that Donatella Versace renounced the creative director of the brand founded by her late brother Gianni.
“Our goal is to continue with the legacy of Versac celebrating and reinterpreting its bold and timeless aesthetics,” said Prada President Patrizio Bertelli,
“At the same time, we will provide you with a strong platform, reinforced by years of ongoing investments and rooted in lung relations,” added Bertelli, husband or designer of Prada, Miuccia Prada. The couple are the main shareholders of the company.
Donatella Versace, whose family sold the business seven years ago, praised the new association.
“Gianni and I have always had a great admiration for Miuccia, Patrizio and his family,” he said.
“I feel honored to have the fire in the hands of an Italian family business so reliable and I am ready to support this new era for the brand in any way I can,” he added.
Discount price
The price that Prada agreed to pay is a great discount for the approximately $ 2.15 billion, including the debt that USA. Capri, then known as Michael Kors, paid Versace in 2018 when it was sold by the Versace and Blackstone family.
The reports of the previous media had suggested an assessment of around 1.5 billion euros ($ 1.7 billion), but that was before the recent market agitation on the rates.
“This transaction reflects our commitment to increase the value of the actions, the strengths our balance sheet and feed the future growth of Michael Kors and Jimmy Choo,” said CEO of Capri, John Idol.
Capri’s shares were 3% lower in the first operations in New York and so far have dropped 24% during the year.
Having Versace, with its daring baroque -style impressions, will bring new customers to Prada, known for its minimalist style.
“Versace has great potential. The trip will be long and will require a disciplined execution and patience,” said Andrea Guerra, CEO of Prada.
Prada said that he had committed 1,500 million euros of new debts to finance the agreement.
The measure occurs at a time when several acquisitions and OPI have spit legs following a sale of world capital and fears of recession caused by the new Trump President Trump’s new rates.
From the acquisitions of Prada at the end of the 1990s of Helmut Lang and Jil Sander, which the shareholder of Prada Bertelli called “strategic errors”, the group has remained largely without deals.
Prada draws its roots to a leather items founded in Milan by the grandfather of the designer Miuccia Prada in 1913.
Known for its Head Medusa logo, the label was founded by Gianni Versace in Milan in 1978.
Donatella became her creative force after Gianni’s murder in Miami in 1997.
List in Hong Kong, Prada has expanded rapidly under Miuccia and Bertelli, possess other brands, including Miu Miu and the rapidly growing church.