Ermenegildo Zegna Group To Go Public in SPAC Deal Worth $3.2 Billion

Upon completion of the deal, the Zegna family will retain a controlling stake of approximately 62 per cent.

Jul 19, 2021 | By Terence Ruis
Ermenegildo Zegna NY Flagship Store

Credit: Ermenegildo Zegna

Italian luxury house Ermenegildo Zegna Group has agreed to go public by merging with Investindustrial Acquisition Corp. (IIAC), a US special-purpose acquisition company. The deal values the world-renowned fashion house at US$3.2 billion.

Upon finalisation of the transaction — expected to happen in the fourth quarter of 2021 — the Zegna family will hold onto the company’s control with a stake of approximately 62 per cent. IIAC will be provided with an 11 per cent stake in the Italian brand.

This is a strategic shift for the 111-year-old family-run business and follows a trend of consolidation in the luxury goods market. In 2018, Michael Kors Holdings Ltd. acquired Versace for US$2.1 billion. Earlier this year, LVMH Moët Hennessy Louis Vuitton SE purchased Tiffany & Co. at US$15.8 billion. Unlike these deals, however, Zegna’s transaction allows it to go public yet retain a controlling stake.

Lanificio Zegna - Trivero, Valdilana (Biella)

Credit: William Daniels

In a statement to FT, Gildo Zegna, the brand’s 65-year-old CEO said Zegna could have remained independent for another 100 years, but felt the moment was appropriate as “the world has changed a lot and luxury has become very challenging”.

He added: “The opportunity came and we took advantage. Scale is becoming important . . . with the right partner . . . we can do a super job in taking new opportunities if they come along.”

Zegna was founded by Ermenegildo Zegna — Gildo’s grandfather — as a fabric maker in 1910. Since then it has grown into a global leading player in luxury menswear. It has hit numerous milestones along the way, including becoming the first luxury menswear brand to open in China. Now, Greater China represents Zegna’s largest market.

In 2018, Zegna acquired the majority stake in American luxury fashion brand Thom Browne. The move came about as Zegna sought to attract a new generation of customers. Since the acquisition, Thom Browne has doubled its revenues.

Attracting a younger customer base remains a key focus for the brand.

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