Luxury goods group Richemont said on Monday that it has concluded the merger of its high-fashion online retail business Net-A-Porter with Yoox, a global Internet retailer for fashion brands, and will now receive 65,6m shares in the enlarged Yoox Net-A-Porter Group.
Yoox owns popular fashion websites such as yoox.com, thecorner.com and shoescribe.com.
Richemont announced plans to merge the online fashion brands in March, pending shareholder and regulatory approval.
The combined entity will be incorporated in Italy and continue to be listed on Borsa Italiana, Richemont said at the time.
Natalie Massenet, founder and executive chairman of The Net-A-Porter Group, will serve as executive chairman of the merged entity, while Federico Marchetti, founder and CEO of Yoox Group, will be CEO, it said in March.
Richemont will hold 50% of the combined entity’s share capital, although its voting rights will be limited to 25% “to preserve the independence of the Yoox Net-A-Porter Group”.
Two representatives from Richemont will serve on the board of the combined entity’s listed parent company, which will have at least 12 directors. Richemont will equity account its investment in Yoox Net-A-Porter Group.
Richemont has committed to a lock-up period of three years in respect of shares equivalent to 25% of the total share capital of the combined entity.
The all-share transaction will generate a significant one-off, non-cash, accounting gain in Richemont’s financial statements for the full year ending 31 March 2016. Based on the 2 October closing Yoox share price, the amount of the pre- and post-tax accounting gain is estimated to be between €610m and €670m (R9,4bn and R10,3bn).
“Established business models are being increasingly disrupted by the technological giants. It is with this in mind that we believe it is important to increase leadership and size to protect the uniqueness of the luxury industry,” said Richemont chairman Johann Rupert in a statement in March. “The merger of the two leaders will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands.” — © 2015 NewsCentral Media