Coach will pay $ 18.50 per share in cash, for a total value of $ 2.4 billion, reports CNN.
The share closed last night at $ 16.97 on the Nyse.
The statement said the deal represents a 27.5% premium over the closing price of the Kate Spade share on December 27, 2016 (before speculation on the record begins).
Coach said it had identified global expansion opportunity through opening Kate Spade specialty stores. Globally, Kate Spade has 133 specialty stores, 82 outlet stores and 54 stores similar to franchises exclusively in foreign markets.
“Through this acquisition, we will create the first New York-based house of modern luxury lifestyle brands, defined by authentic, distinctive products and fashion innovation,” Coach CEO Victor Luis said in a statement. “We are confident that this combination will strengthen our overall platform and provide an additional vehicle for driving long-term, sustainable growth.”
The transaction, which will be completed in the third quarter of 2017, is expected to have an accretive impact on non-GAAP results for the Group’s fiscal years 2018 and 2019.
Kate Spade shares rose 8.1% to $18.35 in pre-market trading Monday.