The Prada Group announced a deal Thursday to buy crosstown Milan fashion rival Versace from the U.S. luxury group Capri Holdings under terms that values

The price Prada has agreed to pay for Versace is a big discount to the roughly $2.15 billion including debt that Capri paid for Versace in 2018. Previously known as Michael Kors, Capri bought Versace from the Versace family and Blackstone.

The purchase, the largest in Prada’s 112-year history, returns Versace to Italian ownership and could put the company in a better position to compete with bigger luxury rivals such as LVMH and Kering SA.