Prada Agrees to Buy Versace for $1.38 Billion, Strengthening Its Position in Italian Fashion
Prada, the Milanese fashion company, has agreed to buy Versace for $1.38 billion in cash, the largest purchase in its 112-year history. The deal aims to strengthen Prada’s position as Italy’s largest fashion group and return Versace to Italian ownership.
Deal Details
The transaction is expected to close in the second half of this year, according to a joint statement from Prada and Versace. The deal was first reported by Bloomberg News on March 2, which indicated that Prada was near a deal to buy Versace from Capri Holdings, which acquired the brand in 2018 for $1.8 billion.
Purpose of the Acquisition
The purchase is expected to put Prada in a better position to compete with larger luxury rivals such as LVMH and Kering. It also gives Versace a chance to turn around its fortunes, which have been struggling under Capri Holdings’ ownership.
Global Market Turmoil
The agreement was reached despite global market turmoil triggered by US President Donald Trump’s tariff offensive. Prada has been negotiating for months to buy Versace, which was founded by Gianni Versace in the 1970s and is known for its flashy, ready-to-wear designs.
Conclusion
The acquisition of Versace by Prada is a significant move in the fashion industry, strengthening Prada’s position as a major player in Italian fashion. The deal returns Versace to Italian ownership and provides an opportunity for the brand to turnaround its fortunes under new leadership.
Frequently Asked Questions
Q: Why is Prada buying Versace?
A: Prada is buying Versace to strengthen its position as Italy’s largest fashion group and to return Versace to Italian ownership.
Q: How much did Prada pay for Versace?
A: Prada paid $1.38 billion in cash for Versace.
Q: Who is Gianni Versace?
A: Gianni Versace was the founder of the Versace fashion house in the 1970s.
Q: What is the significance of this deal for the fashion industry?
A: The acquisition of Versace by Prada is significant because it strengthens Prada’s position as a major player in the fashion industry and returns Versace to Italian ownership.
Q: Will this deal affect the global fashion market?
A: The deal may have an impact on the global fashion market, as it changes the ownership structure of two major fashion brands and could lead to changes in their business strategies and operations.
