Choo was bought out in 2001, with Mellon leaving in 2011. The deal is worth $1.2 billion. Jimmy Choo had put itself up for sale after its major shareholder JAB made a decision to focus on consumer goods.
Shares of Michael Kors were trading higher by more than 3 percent following the announcement. Michael Kors has completely saturated the handbag market-the company is the top handbag maker in the US -with the MK logo seemingly appearing everywhere when you walk down the street. Michael Kors' shares sank more than 4 percent, as some on Wall Street anxious the deal may add to the retailer's own struggles of late.
Jimmy Choo's largest shareholder, JAB Holding, said that it supports the deal.
The price is equal to about 13 times Jimmy Choo's adjusted earnings for 2017, according to Bloomberg Intelligence analyst Deborah Aitken.
Michael Kors is set to open new Jimmy Choo retail stores and develop its online presence, while also expanding its range of fashion offerings.
The acquisition is an opportunity to grow Jimmy Choo sales to $1 billion and it provides greater exposure to global markets, particularly in Asia. "Its innovative designs and exceptional craftsmanship resonate with trendsetters globally", Michael Kors chief executive John Idol said in a statement, according to USA Today.
The terms of the transaction allows Jimmy Choo to still operate under its existing management team, including the chief executive, Pierre Denis.
"Our two companies share the same vision of style and trend leadership".
For Michael Kors, still the top USA handbag brand with 24.8% of the market to Coach's 13.9% (they crossed over in 2013) according to Euromonitor International, the move allows it to make a big push into high end footwear, and become less reliant on its bread-and-butter handbag business.