Luxury Italian fashion house Prada has negotiated a deal to buy its smaller rival Versace for $1.4 billion, in a move that will unite two of the biggest names in Italian fashion.

According to Reuters, Prada has been seeking to expand, despite the global slowdown in luxury demand, while Versace has been operating at a loss.

The merger aims to strengthens Italy’s stakes in the luxury fashion industry, currently led by French conglomerates.

The deal comes after the March 13th announcement that Donatella Versace was stepping down as the chief creative officer of the brand, which was founded by her late brother Gianni.

A statement from Prada added that Versace will maintain control of its creative DNA and cultural authenticity.