Moncler, the Italian maker of luxury puffer jackets, has agreed to buy Stone Island in a cash-and-share deal that values its smaller rival at €1.15bn.
In the first step of a two-part acquisition, Moncler will buy 70 per cent of the company that owns Stone Island from chief executive Carlo Rivetti and his family. It will then buy the remaining 30 per cent from Temasek, the Singaporean state-backed investor.
The Rivetti family will subscribe for newly issued Moncler shares equal to 50 per cent of the cash consideration received at €37.51 a share, according to a joint statement. Temasek will have this option available to it but, should it prefer cash only, then Moncler will pay out €748m in total.
“We’re coming together at a challenging moment both for Italy and the world, when everything seems uncertain and unpredictable,” said Remo Ruffini, chief executive of Moncler. “We need new energy and new inspiration to build our tomorrow.”
The deal values Stone Island, an Italian brand popular with celebrities such as rapper Drake and former Oasis lead singer Liam Gallagher, at 16.6 times its 2020 earnings before interest, tax, debt and amortisation.
A consolidation in the luxury sector comes as the industry stages a recovery from coronavirus that has hit travel-dependent sales yet gained support from resilience in the Chinese market.
Moncler’s shares rose 3.4 per cent in early Milan trading on Monday, pushing their value up 19 per cent over the past month.