Groupe Arnault, headed by Bernard Arnault, is set to fold prestigious fashion house Christian Dior into his LVMH luxury business empire, in what has been described as one of the biggest business transactions in recent times.
According to Financial Times, this deal has been a long-awaited one and will see the family company Groupe Arnault buying out the minority shareholders of Christian Dior for about $13.2 billion( €12.1bn).
In their statement released on Tuesday, the Arnault family said it will offer a mix of cash and shares it holds in Hermès that values Dior at €260 per share, and this represents 15% of the stock’s close price as at Monday. Groupe Arnault will then sell the Dior Couture business to the LVMH so that the whole Dior brand will be integrated into the LVMH group.
Dior’s fragrance and cosmetics business reportedly had already been integrated into the LVMH group.
“The corresponding transactions will allow the simplification of the structures, long requested by the market, and the strengthening of LVMH’s fashion and leather goods division thanks to the acquisition of Christian Dior Couture, one of the most iconic brands worldwide,” the Groupe Arnault said in its statement today.
Financial Times reports that market analysts have reacted positively to this deal. In his statement to the press, Luca Solca who is the head of luxury goods at Exane BNP Paribas, said:
“It adds a strong brand to the LVMH portfolio at a reasonable valuation and on an accretive basis. It reduces the risk of LVMH buying potential “trophy assets” at the expense of diluting its return on invested capital.”
LVMH is the parent company of major brands, including Hermes, Marc Jacobs, Hennessy, Dom Pérignon, Givenchy, Givenchy Parfums, and more; also, including retailing stores like Sephora.
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