Potential Prada-Versace Acquisition Faces Uncertainty Amid Market Volatility

The anticipated acquisition of iconic fashion house Versace by Prada is teetering on uncertain ground as global financial markets experience severe turbulence, according to the Wall Street Journal. The deal, which has been under active negotiation for weeks, is reportedly valued at around $1.4 billion, though insiders say talks have been strained by market instability and shifting financial expectations.

Per the Wall Street Journal, Prada shares saw a 4.93% increase recently, while Capri Holdings — the current owner of Versace — also experienced a notable 31.09% jump, reflecting investor optimism. However, sources familiar with the discussions caution that optimism may be premature. The deal is said to be hanging by a thread, with insiders estimating the likelihood of completion at just about 50-50.

People close to the matter revealed that while a formal announcement could come as early as Thursday, several key hurdles remain. Chief among them is the lack of final approval from the Versace family, a critical stakeholder in the deal. Without their endorsement, the acquisition may falter, regardless of how advanced the negotiations are.

Related: Prada Set to Acquire Versace for €1.25 Billion

According to the Wall Street Journal, the original transaction price was expected to be in the neighborhood of $1.6 billion. However, recent economic shifts — including mounting global trade tensions and retaliatory tariffs between the United States, China, and the European Union — have led to a downward revision of the valuation. These pressures have particularly impacted luxury goods companies like Versace, whose international operations are vulnerable to changing tariff structures.

Sources familiar with the talks noted that the price reduction came as concerns mounted about how the new tariffs would affect Versace’s bottom line. There remains the possibility of minor adjustments to the deal’s financial terms, and the exact timing of any public announcement is still in flux.

As financial markets continue to react to geopolitical uncertainties, the future of one of the fashion industry’s biggest potential mergers remains unclear — a reminder of how broader economic force.

Source: The Wall Street Journal