Germany-based online retailer Zalando ($ZAL) has reached an agreement to acquire local competitor About You through a voluntary public tender offer, aiming to expand its market share in the European fashion and lifestyle e-commerce landscape. Zalando is proposing a purchase price of 6.50 euros per share for About You’s stakeholders, which signifies a remarkable 107% premium relative to the target company's three-month average share price as of Tuesday.
Major stakeholders of About You, who collectively hold a 73% share, have already signed binding agreements to sell their shares to Zalando, the companies unveiled in individual releases on Wednesday. The agreement focuses on a dual-brand strategy, allowing both brands to maintain their unique identities aimed at catering to their respective customer bases.
Zalando targets fashion enthusiasts by offering an extensive range of brands, while About You is tailored for a younger, style-centric fashion audience. Robert Gentz, Zalando’s co-chief executive officer and co-founder, remarked, "In B2C, we can offer customers and brands distinct and rich shopping experiences.
In B2B, combining our complementary software capabilities, Tradebyte and SCAYLE, will create an even more advanced e-commerce operating system that enables brands and retailers to manage their multi-channel business across Europe and beyond." Both the management and supervisory boards of About You are in favor of Zalando's acquisition offer and plan to endorse it to shareholders.
The founders and current management board members of About You are set to retain their roles within the newly formed group. Subject to regulatory approvals, the transaction is expected to finalize in the summer of 2025. The united business is projected to achieve a compound annual growth rate of 5% to 10% in gross merchandise value and revenue by 2028. Analysts at RBC Capital Markets indicated that the acquisition could bolster Zalando's market presence in Europe and present logistical synergies; however, they also noted potential execution and cultural risks.
They stated, "This aligns with ZAL's strategy for bolt-on M&A but likely means cash returns are less probable now." By Wednesday midmorning, Zalando's stock had declined nearly 5% in Frankfurt..