Look past the tariff-induced price tags on increasingly expansive products for a moment and consider the impact that Trump’s tranche of tariffs is having on M&A. The headline-making deal here is, of course, Prada Group’s impending acquisition of Versace. Rumors were finally quelled on Thursday when Prada confirmed that it will take over Versace for a cool $1.375 billion. That is reportedly a $200 million discount on the original price; the price was negotiated down from an initial price of $1.6 billion, with “market swings and the uncertain impact of tariffs, which have slammed into luxury retail, complicating the two sides’ coming to a final agreement,” according to the WSJ.
Now that the initial legwork of the deal is done (it is subject to regulatory approvals and the final price may be adjusted at or after closing based on estimates of Versace’s working capital and net debt), it is being scrutinized.
> “Versace is a well-known brand and should be complementary to Prada,” said Luca Solca, the chief luxury goods analyst at Bernstein. However, “the Versace business is in need of a complete turnaround,” making this something of a “risky move,” Solca says, particularly given Prada’s “very bad M&A track record.”
> Industry advisor Achim Berg stated that the acquisition “represents Prada’s serious attempt to build a group – and a much more ambitious one compared to their past ventures with Helmut Lang and Jil Sander.”
> A bit more optimistic, Morningstar’s senior equity analyst Jelena Sokolova says that the deal “makes sense both financially and strategically. By acquiring businesses of different character, brands can help protect themselves and smooth the cyclicality of performance.”
THE BIGGER PICTURE: Aside from the impact of a volatile market on Prada and Versace, other potential deals and fundraising rounds are being rocked by the market. WWD reports that Kim Kardashian’s Skims “had been out looking to top off its latest fundraising round ahead of a potential initial public offering in the second half but hit pause on the fundraising.” At the same time, exclusive talks between Marquee Brands and Levi’s over ownership of Dockers have reportedly stalled, as Marquee “couldn’t get comfortable with the price in the tariff mayhem and had to let the opportunity slip.”
“The interplay of new tariffs and new merger and acquisition activity, including private equity, is poised to create a perfect storm of higher risks in M&A deals,” according to Barnes & Thornburg’s Luis Arandia and Clinton Yu.
“Participants in M&A transactions face considerable uncertainty as the implementation of certain tariffs has come into effect and the potential impact and duration of announced tariffs remains unknown,” according to a note from Dentons. Against this background, “Tariffs could have a chilling effect on cross-border M&A as parties wait for clarity on what tariffs the US government will maintain and what retaliatory measures [other countries] will take in response.”
Stanford’s Institute for Human-Centered AI released the 8th edition of its AI Index this week, in which it provides insights into AI’s technical progress, economic influence, and societal impact. Some of the critical takeaways for the legal- and business-minded folks …
Regulation/legislation: In 2024, U.S. federal agencies introduced 59 AI-related regulations (more than double the number in 2023) and issued by twice as many agencies. Globally, legislative mentions of AI rose 21.3% across 75 countries since 2023, marking a ninefold increase since 2016. Across 75 major countries, AI mentions in legislative proceedings increased by 21.3% in 2024, rising to 1,889 from 1,557 in 2023. Since 2016, the total number of AI mentions has grown more than ninefold.
Before 2024, only five states – California, Michigan, Washington, Texas, and Minnesota – had enacted laws regulating deepfakes in elections. In 2024, 15 more states, including Oregon, New Mexico, and New York, introduced similar measures. Additionally, by 2024, 24 states had passed regulations targeting deepfakes.
Patent Protection: Between 2010 and 2023, the number of AI patents has grown steadily and significantly, ballooning from 3,833 to 122,511. In just the last year, the number of AI patents has risen 29.6%.
AI Adoption & Impact – Companies’ AI usage is accelerating: 78% of organizations reported using AI in 2024, up from 55% the year before. Most companies that report financial impacts from using AI within a business function estimate the benefits as being at low levels. 49% of respondents whose organizations use AI in service operations report cost savings, followed by supply chain management (43%) and software engineering (41%), but most of them report cost savings of less than 10%.
With regard to revenue, 71% of respondents using AI in marketing and sales report revenue gains, 63% in supply chain management, and 57% in service operations, but the most common level of revenue increases is less than 5%.
Responsible AI (“RAI”): AI-related incidents are rising sharply, yet standardized RAI evaluations remain rare among major industrial model developers. However, new benchmarks like HELM Safety, AIR-Bench, and FACTS offer promising tools for assessing factuality and safety. A McKinsey survey on organizations’ RAI engagement shows that while many identify key RAI risks, not all are taking active steps to address them. Risks including inaccuracy, regulatory compliance, and cybersecurity were top of mind for leaders with only 64%, 63%, and 60% of respondents, respectively, citing them as concerns.
This week, B Lab unveiled sweeping updates to its B Corp certification standards—the most significant overhaul since the certification’s inception. Departing from its long-standing points-based assessment model, the new framework introduces a set of mandatory requirements that companies must meet across seven core Impact Topics, ranging from climate action to equity and governance.
With these changes, which you can dive into right here, B Lab aims to reinforce the credibility of the B Corp badge, ensuring that certified companies are not only well-intentioned but are also delivering measurable, high-impact results.