Top US duo leads as Michael Kors buys Versace for $2bn

Cleary Gottlieb Steen & Hamilton, Wachtell Lipton Rosen & Katz and Slaughter and May are advising on fashion giant Michael Kors’ $2.13bn (£1.6bn) purchase of iconic Italian brand Versace.

Cleary is acting alongside Milan-based firms Chiomenti and Effevi Legal in advising primary sellers GiVi Holdings, Donatella Versace and Versace chief executive Jonathan Akeroyd, while Rome-headquartered Gianni, Origoni, Grippo, Cappelli & Partners are advising private equity firm Blackstone Group in disposing its 20% stake in the Italian fashion house.

The Financial Times has also reported: 

US luxury group Michael Kors is set to announce a deal to buy Milanese fashion house Versace in a deal worth about $2bn, according to two people briefed on the talks.

The agreement, expected to be announced on Tuesday morning, will see the Versace family selling alongside US private equity firm Blackstone, which took a 20 per cent stake in Versace in 2014. The $2bn valuation includes net debt.

The deal would come after Versace, one of the last independent fashion houses, put the brakes on an initial public offering because market conditions were not deemed suitable, according to a person briefed on the decision.

Another person informed of the talks said the deal was not yet final and Versace had spoken to other possible buyers.

It would be the latest independent European runway brand to decide to sell in recent months. Italy’s Missoni family announced an agreement to sell a minority stake of its eponymous brand to a private equity venture backed by the Italian state before the summer, and Antwerp-based Dries Van Noten sold a majority stake to Spanish luxury group Puig in June.

Meanwhile, Michael Kors has been seeking to buy up brands in order to create a US rival to European luxury conglomerates LVMH, Kering and Richemont.Versace, famous for its Medusa-head logo, remains mostly in the hands of Donatella Versace, 63 — sister of founder Gianni Versace who was murdered in 1997 in Miami Beach — Santo Versace, 73, Gianni’s brother, and Allegra Versace Beck, 32, Gianni’s niece.

Donatella, after overcoming a spiral of addiction and depression following her brother’s murder, has staged a revival of the brand, hiring outside managers to put it on the road to a public listing or sale. The entrance of Blackstone with a 20 per cent stake was a key step in improving governance, but it has still struggled to aggressively boost revenues and profits. The brand returned to profit last year posting earnings of €15m on revenues of about €680m, according to a person who has seen the numbers. About half of its sales are made in Asia.

Nonetheless, Versace has raised its media profile in the past year ahead of a potential sale. In September last year, Ms Versace brought back 1990s supermodels Carla Bruni, Claudia Schiffer, Naomi Campbell, Cindy Crawford and Helena Christensen to walk the fashion house’s catwalk show, which included a retrospective of Gianni’s best known designs.

Michael Kors has sought to put several difficult years behind it, after the double-digit same-store sales growth it recorded following its initial public offering evaporated. The entry-level US luxury brand shuttered stores in 2017 to bolster profitability and, in the same year, the group pounced on Jimmy Choo, the maker of pumps that can retail for more than $2,000 a pair.

The decisions have paid off, with its most recent quarterly results showing an improvement in the closely watched same-store sales metric. Operating profits and revenues have also been on the rise, which analysts at Cowen attributed partially to the company’s decision to reduce promotions and focus on higher priced merchandise.

 

PH, Wachtell lead on Samsung’s $8 bln Harman buy

Paul Hastings has advised South Korean electronics major Samsung Electronics on its $8 billion acquisition of U.S. automotive tech company Harman International Industries, which was represented by Wachtell, Lipton, Rosen & Katz.

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According to Reuters, the transaction marks the biggest overseas acquisition ever by a South Korean company. The transaction highlights Samsung’s efforts to break into the high-barrier automotive industry where it has little track record and also marks a strategic shift for the electronics company, which has previously shunned big acquisitions.

The Paul Hastings team was led by the firm’s global M&A practice chair Carl Sanchez and Daniel Kim, head of the firm’s Korea corporate practice.Paul Hastings has also advised on previous Samsung deals including the acquisition of luxury appliance brand Dacor, and Corning’s fiber optics business.

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US, UK and Dutch heavyweights lead on Qualcomm’s $47bn acquisition

A number US, UK and Dutch heavyweights have won work on Qualcomm’s $47bn (£38.6bn) acquisition of NXP Semiconductors.

Paul Weiss Rifkind Wharton & Garrison advised Qualcomm on the acquisition, with new corporate star Scott Barshay providing M&A advice alongside partner Steve Williams and tax partner Jeff Samuels.

Barshay’s old firm Cravath Swaine & Moore also won work on the deal, providing finance advice from partners Geroge Zobitz and Scott Bennett. Partners Christine Varney and Yonaten Even worked on antitrust matters.

Allen & Overy advised Qualcomm in Amsterdam, with a team led by corporate partner Christiaan de Brauw. Other team members included tax partner Godfried Kinnegim and corporate partner Joyce Leemrijse.

DLA Piper partners Jay Rains, Doug Rein and Jeff Baglio acted as legal counsel to Qualcomm’s board in the US, while Shearman & Sterling advised Qualcomm on competition law aspects of the acquisition. The Brussels team was led by partners Miguel Rato and Stephen Mavroghenis.

Meanwhile, Sullivan & Cromwell partner Stephen Kotran represented Goldman Sachs as Qualcomm’s financial adviser.

Skadden Arps Slate Meagher & Flom was on hand for the target NXP – a Dutch semiconductor manufacturer. Skadden’s team was led by New York partner Allison Schneirov, who was supported by partners Laura Kaufmann Belkhayat, Kenton King and Alexandra McCormack.

Executive compensation and benefits matters were handled by partner Regina Olshan, while partners Maria Raptis and Steven Sunshine advised on antitrust issues. Partners Ingrid Vandenborre and Gavin White worked on EU competition law and tax advice respectively.

Dutch firm De Brauw Blackstone Westbroek also provided M&A advice, with a team led by partners Arne Grimme and Reinier Kleipool. Tax advice was handled by partner Wiebe Dijkstra.

Qatalyst Partners served as NXP’s financial adviser and sought advice from Jones Day London partner Ferdinand Mason, San Francisco partner Steve Hibbard, Cleveland partner James Dougherty and Silicon Valley partner Daniel Mitz.

The deal will see Qualcomm acquire all of shares of NXP for approximately $47bn. The combined company is expected to have revenues of more than $30bn.