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NEW YORK, May 9 (Xinhua) -- New York-based handbag maker Coach Inc announced on Monday that it will buy fashion product designer Kate Spade & Co for 2.4 billion U.S. dollars in hopes that the latter's popularity among younger generations would help expand its market share amid a challenging retail environment.


Under the terms of transaction, Kate Spade shareholders will receive 18.50 dollars per share in cash for a total transaction value of 2.4 billion dollars.


The transaction represents a 27.5-percent premium to Kate Spade's unaffected closing price of 14.51 dollars per share on Dec. 27, 2016 Adoree' Jackson Womens Jersey , the last trading day before media speculation that the company was looking to sell itself.


"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," said Victor Luis, chief executive officer of Coach.


"Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers Kevin Byard Womens Jersey , especially millennials," Luis said.


Known for crisp color, graphic prints and playful sophistication, Kate Spade's handbags are popular among millennials for its sleek and modern design.


Certain collections of its bags bear icons and elements of New York, thus having its unique appeal to many consumers. For example, some of its handbags are in the shape of a yellow cab or a patisserie from a well-known local bakery.


Despite its global presence Derrick Henry Womens Jersey , Kate Spade & Co generates the majority of its revenue in North America. In the past couple of years, around 80 percent of its revenue was made from domestic markets, analysts said.


Moreover, the retail environment is becoming more and more challenging thanks to the rise of e-commerce. Many U.S. retailers and department stores have been closed lately at an unprecedented rate.


Kate Spade has a relatively small retail footprint and is expanding its e-commerce business, whereas Coach has its own strength in global operation and international brand building.


In this regard, the acquisition will create a synergy effect that helps Kate Spade build its brand and increase profits from the largely under-tapped global market.


"We are confident that this combination will strengthen our overall platform and provide an additional vehicle for driving long-term Jonnu Smith Womens Jersey , sustainable growth," Luis said.


Craig A. Leavitt, chief executive officer of Kate Spade & Co, believes that reaching an agreement to join Coach's portfolio of global brands will "maximize value for our shareholders and positions Kate Spade for long-term success as we continue our evolution into a powerful, global, multi-channel lifestyle brand."


The deal Corey Davis Womens Jersey , which is not subject to any financing condition, is expected to close in the third quarter of 2017.


On Monday, Kate Spade's shares rose 8.31 percent to close at 18.38 dollars per share after the official announcement of the deal.


Coach's acquisition of Kate Spade is its biggest deal yet, following the buyout of shoe maker Stuart Weitzman in 2015 in a deal valued up to 574 million dollars.


Earlier this month, Coach is reportedly mulling a possible acquisition of British luxury shoe manufacturer Jimmy Choo.


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