What Qatari royals have to gain from Kering’s Valentino deal: the luxury fashion giant’s US$1.8 billion acquisition from Mayhoola gives them a foot in the door – and possibly new partnerships

Aug 2 , 2023

Kering’s François-Henri Pinault and Qatar’s Emir Sheikh Tamim bin Hamad Al Thani. Photos: @SRamzis/Twitter, AP

Kering is set to acquire a 30 per cent stake in Valentino, after confirming its US$1.8 billion deal with Mayhoola, the investment vehicle backed by the Qatari royals

This investment gives Qatar’s royal members a foot in the door to the French luxury fashion giant, as it focuses on a long-term approach amid Gucci’s slowdown and rival LVMH’s post-pandemic boom

Kering’s deal to acquire a 30 per cent stake in Valentino gives the Qatari royal family a foot in the door of a much bigger luxury giant, as they consider further joint investments with the French group to expand their alliance.

French luxury conglomerate Kering has reached a cash deal to purchase a 30 per cent stake in Italian fashion house Valentino for €1.7 billion (US$1.87 billion) from a Qatari investment firm. Photo: AP

Kering said on Thursday it was buying the stake for 1.7 billion euros (US$1.87 billion) in cash from Mayhoola, the investment vehicle backed by the Qatari royals, with an option to purchase the remaining shares no later than 2028.

The deal, hot on the heels of Kering’s acquisition of high-end perfumer Creed, highlights the return of big-ticket M&A activity in the sector as luxury groups look to diversify sources of revenue against an uncertain economic background and slowing demand.

Emir of Qatar Sheikh Tamim bin Hamad Al Thani delivers his speech during the opening ceremony of the Kuala Lumpur Summit in Kuala Lumpur in December 2019. Photo: AFP

It also paves the way for the Qatari royals to play a higher-profile role in the 400-billion euro luxury goods market, traditionally dominated by family-owned European companies.

The Valentino investment is part of a broader strategic partnership between Kering and Mayhoola, which could lead to Mayhoola becoming a shareholder in the French group, Kering said late on Thursday.

Italian fashion designer Valentino, right, standing underneath the logo of his fashion house, answers the questions of a fashion reporter before the presentation of his haute couture spring/summer 2008 fashion collection, in 2008, in Paris. Photo: AP

Mayhoola aims to build a stake in the luxury giant by initially acquiring shares in the market, a source with knowledge of the deal said on Friday.

In five years Mayhoola could further increase its stake by selling the remaining 70 per cent of Valentino to Kering for a mix of cash and Kering shares, the source said. Mayhoola bought the Rome haute couture house in 2012 from private equity fund Permira for around 700 million euros.