NEW YORK--Marzotto SpA, Valdagno, Italy, has agreed to acquire the woolen textile operations of Mosilana AS, in Brno, Czech Republic.
The agreement, which has been in discussion for two years, provides for the incorporation of a new company, Nova Mosilana AS, 90 percent of which Marzotto will control directly or indirectly, for a total investment of $9.4 million (15 billion lire) at current exchange. Mosilana AS will keep 10 percent of the share capital in preferential shares and will contribute to Nova Mosilana the property of its plant in Cernovice, as well as the equipment in the four other woolen operations in the Brno area. Mosilana's management team and 1,300 employees will become part of Nova Mosilana.
The sale is expected to be closed by the end of the year.
Marzotto said it plans to invest $13.8 million (22 billion lire) in the updating of equipment and machinery over the next few years. A Marzotto spokesman added that some layoffs in the work force may take place, although he couldn't specify when.
Marzotto's textile operations include Guabello, a supplier of high-end wool fabrics, and Lanerossi, a manufacturer of wool fabrics for apparel and blankets. Marzotto also produces apparel for such labels as Studio .0001 by FerrÄ, Laura Biagiotti, Missoni and Enrico Coveri. It also owns German men's wear maker Hugo Boss.
Marzotto's 1993 sales were $1.2 billion (1.95 trillion lire) with $270.5 million (430 billion lire) coming from its textile operations.
"The acquisition will not replace any of our current production facilities," said a Marzotto spokesman. "Rather, it is a way to broaden our offerings and to add to our sales."
Mosilana, which had sales last year of $17 million (27 billion lire), could be brought up to $38 million (60 billion lire) over the next four years, the spokesman added.

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