In the just-ended 2019, the last acquisition news that attracted widespread attention in the global luxury goods industry is undoubtedly the intention of Gucci parent company Kering Group to acquire Italian luxury goods group Moncler.
However, according to “Women’s Daily” citing informed sources, the price has become an obstacle to the acquisition, and the negotiations between the two sides have slowed down.
Related sources have previously revealed that Kering is very keen to acquire Moncler. The transaction price may be between 13.5 billion euros and 14 billion euros, which is 30% to 40% higher than Moncler’s 10 billion euro market value.
Kering does have good reasons to acquire Moncler. Currently, Kering Group owns Gucci, Balenciaga, Bottega Veneta, Saint Laurent, Alexander McQueen, and other brands, and Gucci contributed more than one-third of the group’s profits in the first half of fiscal 2019.
Kering relies heavily on its most profitable Gucci, and this situation is a bit dangerous. Kering hopes to find new points of performance growth, and Monster’s development trend in recent years is gratifying.
What’s more, Kering’s competitor LVMH Group just concluded the year with the acquisition of American high-end jewelry brand Tiffany in November 2019, reached the most expensive merger and acquisition transaction in the history of the group, and also reversed its hard luxury market The backwardness of this situation has made Kering’s sense of crisis soar.
Before rumors of Kering’s intention to acquire Moncler flowed out, the acquisition rumors surrounding Kering had not been broken. In the past year or two, Salvatore Ferragamo, Valentino, and Versace have been rumored to be acquired by Kering. All three brands have denied or refused to respond. Versace was later acquired by the Michael Kors Group (later renamed Capri Group).
Although King did not comment on rumors of intention to acquire Moncler from beginning to end, Moncler gave some responses.
Immediately after the news of the negotiations between the two parties came out, Remo Ruffini, Chairman, and CEO of Moncler Group issued a clarification, saying that from time to time, he would contact and communicate with some investors and other peers, including Kering, to explore potential strategies. Give to promote the successful development of Moncler.
Moncler may not necessarily be willing to be acquired by Kering. The Italian luxury goods group has outstanding performance. The third-quarter financial report shows that the Group’s sales have achieved double-digit growth for 23 consecutive quarters. Very good, it’s a shame to sell the company now.
Moncler itself is also accelerating the pace of groundation. In October 2018, it acquired a 49% stake in Italian niche womenswear brand Attico.
The growing strength of giants is an irreversible trend in the luxury industry. In investment bank Morgan Stanley’s latest research report “Merger and Acquisition: Who’s Next”, analysts Elena Mariani and Edouard Aubin said that the polarization of the luxury industry is intensifying, and the performance of giants and big brands continues to exceed the industry as a whole Performance, they believe that this is not only because the multi-brand giants can exert synergies, but also because the giants can attract and retain talent, and provide them with a better development platform.
The luxury industry is now an area of particular interest for investors. According to Deloitte’s “2019 Global Private Equity Fund and Investor Survey for the Fashion and Luxury Goods Industry Survey” by management consulting firm Deloitte, 70% of fund managers surveyed said they would consider investing in the luxury market in the next few years.