By Elisa Anzolin

MILAN (Reuters). Shares of the Italian luxury company Zegna rose Monday in New York after they completed a merger in a $3.1 billion deal with a U.S. special-purpose acquisition company (SPAC).

Zegna shares were trading at $11.00 per piece, 7.4% higher than the initial price of $10.24. According to the company, $2.4 billion was the initial capitalization of the combined group.

Following the merger with Investindustrial Acquisition Corp (a SPAC sponsor by private equity firm Investindustrial, and headed by Sergio Ermotti, former chief executive of UBS), the Zegna family will hold a 66% interest in the group.

In July, the deal was made public by the Italian family-owned fashion company. This is just the latest example where outside investors are able to finance expansion and increase marketing expenditures, helping them compete with more established players.

Speaking to media ahead of market debut, Zegna’s Chief Executive Gildo Zegna said organic growth was his priority. He did however not rule out smaller acquisitions of group suppliers.

Zegna was founded in textile manufacturing and is now a leading luxury manswear brand.

The luxury group was able to raise $169 million from the initial $402.5 million. 58% of investors had taken their money back. Mass redemptions are a regular feature in this type of transaction.

An agreement to backstop the situation with investors outside the company helped close the gap. The final enterprise value was $3.1billion, just short of what had been originally proposed at $3.2billion.

These shares have plummeted in recent weeks for several companies like Grab Holdings or BuzzFeed that were merged with SPAC entities. Investors are pulling the rug from under all the stock hype this year.

Dealogic data showed that the average redemption rate increased more than twice to 58% during the fourth quarter compared with a year ago. This is a result of many businesses falling short of investor expectations.