Dive Brief:
- Ermenegildo Zegna Group will sell 14.1 million treasury shares at $8.95 per share to Venezio Investments, an indirect wholly-owned subsidiary of Temasek Holdings, according to a Tuesday announcement.
- Singapore-based Temasek will hold 10% of Zegna Group once the $126.4 million cash deal closes. Temasek previously acquired 12.7 million shares on the market, and Tuesday’s sale brings its total stake to 26.8 million ordinary shares outstanding, according to the release.
- The transaction is expected to close Wednesday, which is the same day Zegna Group reports first half revenue results. Nagi Hamiyeh, the head of Temasek’s Europe, Middle East and Africa division, is expected to join Zegna Group’s board of directors at its annual general meeting next year, per the release.
Dive Insight:
The deal comes as Zegna Group struggles to find its footing with its Thom Browne brand, which posted a 19% revenue decline in the first quarter of fiscal 2025 and largely contributed to the company’s overall 1% revenue decline for the period.
The Temasek deal enhances Zegna Group’s financial flexibility “to support the organic growth of its current brands’ portfolio,” the company said in Tuesday’s press release.
Temasek’s experience in both the luxury sector and in markets throughout Asia will help Zegna Group expand in geographies “where the Group’s presence remains underdeveloped,” per the release.
“With Temasek’s partnership, we are even better positioned to help strengthen our organic expansion globally and to reinforce our unique role as a custodian of truly authentic brands,” Ermenegildo “Gildo” Zegna, chairman and CEO of Zegna Group, said.
In Q1, Zegna Group posted a 12% revenue decline in China, a region that makes upnearly 27% of the company’s total revenue. Meanwhile, revenue in the rest of the Asia-Pacific region grew 7% in the first quarter, though this segment only accounts for about 12% of Zegna’s total revenue.
“Ermenegildo Zegna Group has successfully established itself in the high-end luxury segment and presents significant long-term value creation opportunities across each brand,” Temasek’s Hamiyeh said in the release. “Our investment in them underscores our ongoing commitment to support leading European businesses with strong track records and global potential.”
