Italian luxury group Ermenegildo Zegna has agreed for a market listing in New York this year by merging itself with a U.S. special-purpose acquisition company (SPAC) in a deal that gives the Italian company a market value of $3.2 billion.
The development is the latest example of an Italian family-owned fashion business seeking outside investors to bolster its finances following the market ravishing coronavirus pandemic.
“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,” said Gildo Zegna, the company’s CEO.
Founded as a textile company in 1910, Zegna is now a leading player in formal menswear. The company is set to raise $880 million by combining with the U.S. SPAC launched by Investindustrial, an European private equity group chaired by Sergio Ermotti, a former CEO at Swiss bank UBS.
As part of the deal, Zegna will sell a portion of its holding and retain 62% of the combined company, which is being given an equity value of $2.5 billion. The deal sees Zegna merging with Investindustrial Acquisition Corp giving the New York-listed entity an 11% stake in the Italian brand.
The Coronavirus-induced COVID-19 pandemic which forced economies to enter into lockdowns, froze international travel, has hit smaller luxury brands harder than bigger ones.
This has led many family owned businesses to attract fresh funds.