Temasek to increase stake in Italy's Ermenegildo Zegna to 10%
The Italian luxury fashion house is targetting a global expansion in the resilient ultra-luxury market.
SINGAPORE - Singapore's state investment firm Temasek will increase its stake in Ermenegildo Zegna Group to 10 per cent, the companies said on July 29, as the Italian luxury fashion house targets a global expansion in the resilient ultra-luxury market.
Temasek is exploring investment opportunities in Europe, where volatility resulting from US President Donald Trump's global trade war has made some companies more attractive on valuation grounds.
One person familiar with the transaction told Reuters that Temasek saw 'fertile ground' in Zegna, which is increasingly open to international investors.
Under the deal expected to close by July 30, Temasek will purchase 14.1 million Zegna treasury shares at US$8.95 each for US$126.4 million (S$162.8 million), the companies said in a statement.
Added to the 12.7 million shares it previously acquired on the open market, that brings Temasek's total stake to 10 per cent.
'With Temasek's partnership, we are even better positioned to help strengthen our organic expansion globally,' Zegna chairman and chief executive officer Ermenegildo 'Gildo' Zegna said.
'One thing is certain: the company is not for sale, the family is still at the helm and this is not going to change,' he said.
Top-tier luxury consumers, those spending over 50,000 euros (S$74,000) annually, continue to spend despite global economic uncertainty.
Though less than 1 per cent of the market, they account for 23 per cent of industry value, according to a report from the Boston Consulting Group. Their spending has remained steady even as aspirational buyers pull back.
Nagi Hamiyeh, Temasek's head of Europe, the Middle East and Africa, is expected to join Zegna's board as a non-executive director at Zegna's next annual general meeting in June 2026.
He said in a statement that the company looks 'forward to being a thoughtful, long-term partner to the Zegna family and management team.'
Proceeds from the transaction will be used to strengthen Zegna's balance sheet and support expansion into new markets, particularly in Asia, where Temasek's regional expertise is expected to play an important role, the statement read.
Zegna is looking to accelerate its transformation into a high-end leisurewear brand from a family-run menswear company, which was founded in 1910 as a humble woolen mill. The Italian company acquired Tom Ford International in 2023 in a push for global growth. Zegna sales rose 2.2 per cent in 2024 to about 1.95 billion euros.
Temasek's net portfolio value reached $434 billion as of March 31, up $45 billion from the year before, thanks in large part to higher share prices at some of its Singapore holdings as well as assets in the United States, India and China. The firm reported divestments worth $42 billion for its last fiscal year – its largest annual disposal on record. REUTERS, BLOOMBERG
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