Italy Moncler: Moncler to Buy Italian Rival Stone Island for $1.39 Billion

Italy Moncler: Moncler to Buy Italian Rival Stone Island for $1.39 Billion

Italian luxury group Moncler SpA agrees to buy its Italian rival Stone Island for 1.15 billion euros ($1.39 billion) in cash and shares.

Moncler, known for its ski wear and fashionable winter jackets, will initially buy about 70% of Stone Island owner SPW from Chief Executive Carlo Rivetti and other members of his family, according to the statement. It will buy the remaining 30% from Singapore’s state investor Temasek.

MILAN, Dec 7 (Reuters) - Italian luxury group Moncler MONC.MI said on Monday it would buy Stone Island in a two-step acquisition deal giving its smaller rival a company value of 1.15 billion euros ($1.39 billion).

The purchase will be paid in cash and in shares. Carlo Rivetti and his family will subscribe for an amount equal to 50% of the consideration, or 10.7 million new Moncler shares, at a set price of 37.51 eur per share, a joint statement said.

Moncler then aimed to acquire the entire share capital of Stone Island by buying 30% held by Singapore state investor Temasek.

The deal is expected to close by the first half of 2021.

With Stone Island, the Italian company, which was approached for a takeover by Kering SA last year, is further expanding in its home territory and in the sportswear industry. “We’re coming together at a challenging moment both for Italy and the world, when everything seems uncertain and unpredictable,” Remo Ruffini, 59, said in the statement.

The deal values ​​Stone Island at 16.6 times the 2020 EBITDA, which is expected to be 68 million euros. The Rickletti family is going to reinvest part of the proceeds to become a shareholder in Moncler.

The Rivetti family will subscribe, for an amount equal to 50% of the proceeds, newly issued moncler shares, an option also reserved for Temasek. Should Temasek decide to pay in cash, only Moncler would pay 748 million euros.

Moncler Chairman and Chief Executive Remo Ruffini said the company would remain "cash neutral or cash positive" even after the deal, speaking to reporters in a conference call.

Ruffini said the two brands would remain independent. The statement said Rivetti would join Moncler's Board of Directors.

($1 = 0.8249 euros)

The luxury industry is set to shrink less than some had feared this year as resilient Chinese consumers and online shoppers mitigate damage from lockdowns, a november report from Bain & Co. said.