Italian fashion house Zegna to go public in $3.2bn SPAC deal

The luxury group will list on the New York Stock Exchange later this year

Ermenegildo Zegna will raise $880 million following its deal with US special-purpose acquisition company. Reuters

Ermenegildo Zegna, the Italian luxury fashion house, plans to go public by merging with a US special-purpose acquisition corporation launched by European private equity group Investindustrial Acquisition.

The deal will value Zegna at $3.2 billion following its listing on the New York Stock Exchange later this year, Investindustrial said in a statement on Monday.

Milan-based Zegna will own 62 per cent of the combined company, which is being given an equity value of $2.5bn, the statement added.

“We could have remained independent for another 100 years. But the moment is appropriate and the world has changed a lot and luxury has become very challenging,” Gildo Zegna, chief executive of Zegna Group, was quoted as saying by the Financial Times.

Zegna's move to list comes as luxury fashion labels seek to consolidate their businesses, in a bid to strengthen finances, as the retail industry grapples with the coronavirus crisis. Earlier this year, French luxury group LVMH acquired Florence-based fashion house Emilio Pucci and is reportedly in talks to take a 60 per cent stake in fashion label Etro through a private equity firm it backs.

The 111-year-old family-owned Zegna will raise $880 million following the deal to further invest in its menswear business and fund its future acquisitions, the company said.

New York-listed Investindustrial will get an 11 per cent stake in the Italian brand.

“Our goal now is to support Zegna in this important new chapter of its history while opening the opportunity to the public to invest in one of the last great iconic independent luxury brands,” Sergio Ermotti, chairman of Investindustrial Acquisition and former UBS chief executive, said.

Renowned for its luxury menswear, Zegna had a retail network spanning 80 countries through 296 directly operated stores, as of December 31, 2020, the company said on its website.

The company runs operations in the UAE in partnership with Al Tayer Group, with its portfolio including brands such as Bottega Veneta, Coach, Dolce & Gabbana, Emilio Pucci, Giorgio Armani and Jimmy Choo, among others. It also has units in other Middle East markets including Saudi Arabia, Bahrain, Kuwait, Qatar and Oman.