Coach is buying Kate Spade for $2.4 billion

Luxury retailer Coach announced on Monday it agreed to buy Kate Spade for $18.50 per share, for a total transaction value of $2.4 billion.

The combined company will create a "leading luxury lifestyle company" supported by significant expertise in "handbag design, merchandising, supply chain and retail operations, according to a statement.

The per-share acquisition price is 27.5% higher than Kate Spade's share price as of December 27, the last day of trading before deal rumors started affecting the stock price.

"Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially millennials," Coach CEO Victor Luis said in the release.

This story is developing. More to come...

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