It follows widespread speculation that e-commerce giant, Amazon, was in talks to acquire the online fashion pureplay.
Richemont will retain 50 per cent of the combined company, to be called Yoox Net-A-Porter Group, which will be traded on the Italian Stock Exchange.
Natalie Massenet, founder and executive chairman of the Net-A-Porter Group, will serve as executive chairman and Federico Marchetti, founder and CEO of Yoox Group, will be CEO of the combined entity.
Richemont’s voting rights will be limited to 25 per cent.
Richemont has committed to a lock up period of three years in respect of shares equivalent to 25 per cent of the total share capital of the combined entity. Upon completion, it will appoint two representatives to the combined company’s board of directors, which will have a minimum of 12 members.
Yoox Net-A-Porter Group is expected to launch a capital increase of up to €200 million to fund future growth opportunities and allow for the entry of strategic investors.
The transaction will be complete in September with Richemont to equity account its investment in the enlarged Yoox Net-A-Porter Group. This transaction will generate a one off, non cash, accounting gain in Richemont’s financial statements for the year ending March 31, 2016 of approximately €317 million.
Johann Rupert, chairman of Richemont, said Richemont has been a pioneer in luxury e-commerce, first as a minority shareholder of Net-A-Porter in its infancy and then as a controlling shareholder since 2010.
“We are proud of Net-A-Porter’s achievements under the leadership of Natalie Massenet, ably assisted by a wonderful team of professionals,” Rupert said.
“Established business models are being increasingly disrupted by the technological giants. It is with this in mind that we believe it is important to increase leadership and size to protect the uniqueness of the luxury industry. The merger of the two leaders will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands.”