The German online fashion retailers Zalando SE and About You Holding SE want to work together in the future.
On Wednesday, Zalando announced that both companies had entered into “an agreement on a strategic business combination.” The Berlin-based group will now submit a voluntary public takeover offer to About You’s shareholders for their shares. The Executive Board and the Supervisory Board of About You therefore intend to recommend that the shareholders accept the offer.
Zalando is offering About You shareholders 6.50 euros per share
As part of the offer, Zalando is offering 6.50 euros per share. This corresponds to “a premium of 12 percent on the analysts’ average price target of 5.80 euros and 107 percent on the volume-weighted 3-month average price of the About You share on December 10, 2024,” said Zalando. The offer therefore “enables the realization of significant value for the existing About You shareholders”.
The Berlin-based group plans to finance the purchase with existing cash capital. The transaction, which is still subject to the usual competition law approvals, is scheduled to be completed in the summer of next year.
Zalando has already secured the majority of About You
Zalando was able to secure a majority stake in About You in advance of the offer. “The company’s major shareholders, including Otto GmbH & Co KG, members of the Otto family, an investment company controlled by Heartland, and all three founders and members of the company’s board of directors, have irrevocably committed to all of the company’s shares held by them of the takeover offer at the offer price,” the company said. Together, these shareholders currently hold 73 percent of About You’s share capital and voting rights.
A two-brand strategy is planned
After the merger, the Zalando and About You brands will remain in the B2C business. Both platforms, which address different target groups, could “serve the individual needs of customers and partners even better with tailored and differentiated shopping experiences,” explained Zalando.
In the B2B sector, however, the existing offers are to be merged. The IT service provider Scayle, which belongs to About You, will “supplement Zalando’s ZEOS e-commerce operating system” in the future, according to a statement. This will create a uniform platform with logistics, software and service functions for brands and retailers.
The merger is intended to realize “significant value creation potential”.
Financially, the two companies hope that the merger will generate “significant value creation potential, including in the areas of B2B, logistics, payment processing and commercial cooperation”. Zalando estimated the desired synergy effects at around 100 million euros per year.
Even after the merger, About You’s top management will remain on board. The founders and co-CEOs Sebastian Betz, Tarek Müller and Hannes Wiese would “continue their successful work in the group in their previous roles,” explained Zalando.