dglobalnews.com LVMH to consolidate hold on Dior in multibillion-euro deal
Published: Tue, April 25, 2017
Markets | By Armando Jensen

LVMH to consolidate hold on Dior in multibillion-euro deal

LVMH to consolidate hold on Dior in multibillion-euro deal

That would streamline the current shareholder structure and help unlock synergies, LVMH finance chief Jean-Jacques Guiony told a telephone news conference.

Shares in both companies jumped Tuesday after Christian Dior, LVMH Moet Hennessy - Louis Vuitton and the Arnault Family Group announced a series of transactions consolidating their activities.

Bernard Arnault, the billionaire businessman, is to buy the rest of Christian Dior he does not already own in a deal which will see LVHM, his luxury good group, purchase Dior's couture brands for €6.5 billion.

"On the strength of its history and favorable prospects, Christian Dior Couture will be a source of growth for LVMH", it said.

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- Christian Dior's shares were up 12 percent at 254 euros by 1030 BST on April 25, while LVMH shares were up 4 percent. The family owns 74.1% of Christian Dior, which in turn owns a controlling stake in LVMH.

LVMH already owns Parfums Christian Dior, while Christian Dior Couture was controlled by the family-owned Groupe Arnault.

In a statement, the companies noted that the Arnault Family Group, which controls LVMH, would purchase all the shares of Christian Dior it doesn't already own for 172 euros each in cash and 0.192 in Hermès worldwide shares. The move sees LVMH, which now owns Perfumes Christian Dior, buying the Christian Dior brand and its haute couture, women's and men's ready-to-wear lines, footwear and leather goods.

"It adds a strong brand to the LVMH portfolio at a reasonable valuation and on an accretive basis and it reduces the risk of LVMH potentially buying "trophy assets" which would dilute returns on capital, the expert said.

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