Prada SpA agreed to buy Versace for about $1.38 billion in cash, strengthening its position as Italy’s largest fashion group by adding one of the luxury industry’s best-known brands.

Italian fashion house Prada has announced that it has bought fellow Italian designer fashion brand Versace for €1.25 billion. ($1.38 billion).

Prada has agreed to buy its smaller rival Versace in a billion dollar deal to unite two of the biggest designer fashion labels. The deal to unite the two Italian brands has an estimated value of $1.36bn (£1.

Prada is getting a discount but not a good deal. After weeks of talks with Michael Kors-owner Capri , the Hong Kong-listed Italian group agreed to pay 1.3 billion euros ($1.4 billion) for Versace. Given Capri paid $2 billion for the brand famous for its Medusa logo in 2018,

Prada is reportedly set to acquire Versace from Capri Holdings for $1.38 billion, scoring a $200 million discount on the previous valuation of the deal due to global trade uncertainties. Capri, which is grappling with debts and weak market demand,

Prada is seeking to expand, having defied a slowdown in luxury demand, while Versace has been operating at a loss. The merger strengthens Italy’s hand in a luxury industry led by French conglomerates.