LVMH To Take Control of Christian Dior in $13 Billion Deal
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LVMH announced that it plans to integrate the entire Christian Dior brand within the luxury group, in an effort to strengthen its fashion and leather goods, division. Currently, Louis Vuitton group already owns part of the brand and its Parfums Christian Dior arm. In total, the deal is valued at around $13 billion.
The deal is a part of a two-pronged strategic project:
The first part of the deal consists of Arnault’s family group (Groupe Arnault) offer to buy the 26 percent of Christian Dior it doesn’t already own for €172 per share in cash and 0.192 Hermès International shares for each Christian Dior share.
Part two- LVMH will acquire Christian Dior Couture from Christian Dior for an enterprise value of €6.5 billion.
Following this deal, LVMH will also own Christian Dior’s haute couture, leather, men’s and women’s ready-to-wear and shoe businesses.
According to Bernard Arnault, chairman and chief executive of LVMH, “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.”
This move will solidify and fuse together the Christian Dior brand. Revenue for Dior has doubled in the past five years with improved profitability and increase in profits. LVMH expects this deal to be closed by the end of May.
This deal is expected to be closed by the end of May. One thing for sure will only strengthen the group’s presence in the luxury market.
Source/images: LVMH & BOF