Un deal M&A en 5 étapes : le cas du deal Prada-Versace
M&A deals regularly make headlines in the business press, yet the strategic processes behind these transactions often remain unclear to students and young professionals. However, understanding the key stages of an M&A operation is essential for anyone interested in finance, consulting, or business law. Here’s a breakdown of the five main steps, illustrated by a recent deal: Prada’s acquisition of Versace, finalized on April 10, 2025.
Step 1: Strategic analysis and target screening
Everything begins with a strategic intent formulated by the acquiring company. This may serve several purposes: accelerating growth, entering a new geographic market, diversifying activity, acquiring new technology, or even reducing competition. Internal strategy or M&A teams (sometimes assisted by investment banks) then assess the market landscape to identify suitable targets based on financial, sectoral, and cultural criteria.
In the luxury industry, consolidation plays a major role—especially with global giants like LVMH and Kering. Prada, aiming to strengthen its position on the global luxury stage, began looking at iconic brands that could expand its footprint in the U.S. market and in the accessories segment. Versace, the iconic Italian brand owned by American group Capri Holdings (also the parent company of Michael Kors and Jimmy Choo), emerged as a prime strategic target. Versace offers strong global recognition, a bold and distinctive style, and significant growth potential, particularly in Asia.
This combination of two legendary Italian fashion houses will give rise to a luxury group with revenues exceeding €6 billion—better positioned to challenge the dominance of sector leaders like LVMH and Kering.
“We are thrilled to welcome Versace to the Prada Group and to open a new chapter for a brand with which we share a deep commitment to creativity, craftsmanship, and heritage.” — Patrizio Bertelli, Chairman and CEO of Prada Group.
Step 2: Approach and due diligence
Once a target has been identified, the acquirer confidentially contacts the seller to express interest. After a Non-Disclosure Agreement (NDA) is signed, a due diligence process begins. This involves a comprehensive review of financials, contracts, debts, ongoing litigations, regulatory compliance, leases, HR policies, and more.
In Prada’s acquisition of Versace, the group’s teams conducted a thorough review of Capri Holdings’ financial health. They evaluated each brand’s individual performance, distribution channels, licensing agreements, manufacturing capacities, and brand perception among consumers. The goal of this due diligence phase was also to validate the potential synergies previously identified during the strategic analysis.
In February 2025, Prada was granted four weeks of exclusive access to Versace’s financial data. This critical step led to the formulation of a formal acquisition offer. The audit revealed a 15% drop in Versace’s revenue in the fiscal quarter ending December 28, along with an increased operating loss of $21 million, up from $14 million the year before.
Step 3: Offer and negotiation
The buyer then submits an offer—typically first a Non-Binding Offer (NBO), followed by a Letter of Intent (LOI)—which is often subject to conditions such as regulatory approval, positive audit results, and confirmed financing. This initiates a negotiation phase around the price, warranties, exit clauses, non-compete clauses, leadership transitions, and more.
In this case, after several weeks of negotiation, Prada moved forward with the acquisition despite market volatility caused by new U.S. tariff hikes announced by Donald Trump. On Thursday, April 10, 2025, the Italian fashion house announced it had reached a definitive agreement with Capri Holdings to acquire 100% of Versace for €1.25 billion. Capri Holdings, which had acquired Versace in 2018 for €1.83 billion, accepted a significant discount due to the downturn in the luxury market and the impact of increased U.S. import tariffs.
Step 4: Legal documentation
Once an agreement is reached, lawyers begin drafting the legal documentation: Term Sheet, Share Purchase Agreement (SPA), shareholder agreements, warranties, conditions precedent, closing timeline, etc.
The SPA is the primary sale contract and outlines all transaction terms, including price, potential adjustments (based on net debt or working capital), schedule, risk allocation, confidentiality clauses, and post-closing provisions. It may be accompanied by side agreements regarding the brand or management continuity.
In the case of Prada’s acquisition of Versace, legal advisors played a critical role in satisfying both parties and ensuring compliance with the regulations tied to the publicly listed nature of the involved companies.
Step 5: Closing and integration
Closing marks the final stage: transfer of ownership, payment, legal filings, and public announcement. It only takes place once all conditions precedent have been satisfied (regulatory approval, financing secured, etc.).
This is followed by the integration phase, which can take several months. It involves aligning IT systems, HR processes, finance operations, corporate cultures, and business functions to realize synergies.
For Prada and Versace, integration has not yet begun, as the closing occurred just last month. However, the main challenge will be to preserve the strong identity of each brand while building a unified, more efficient group. Prada aims to diversify its offering while also positioning itself as a central pillar of an Italian luxury powerhouse capable of standing toe-to-toe with the French duopoly of LVMH and Kering.
An M&A transaction follows a rigorous logic, combining strategic analysis, financial review, negotiation, legal structuring, and human integration. The Prada–Versace case perfectly illustrates this dynamic in the highly competitive global luxury sector. capitalism.
