Michael Kors grabs Jimmy Choo for $1.2 billion

Fashion major Michael Kors has agreed to acquire Jimmy Choo for $1.2 billion. New York-based Michael Kors will be able to diversify its portfolio by acquiring UK-based Jimmy Choo, a brand having strong sales in luxury segment. Michael Kors launched its initial public offer in 2011 and this is a major acquisition by the company after its IPO.

After briefly touching $100 per share in 2014, Michael Kors has witnessed a decline in its stock price. Even with the markets hovering around their all-time highs, Michael Kors stock is trading below $35. The deal could give the brand the much-needed boost.

The company has agreed to pay 230 pence a share for Jimmy Choo. The price offers 18 percent premium to Jimmy Choo’s closing price on Monday. Jimmy Choo stock jumped after the offer was announced.

Coach Inc. has already acquired Stuart Weitzman and Kate Spade & Co. and the current deal offers Michael Kors an entry in high-end shoes segment.