LVMH to Buy Christian Dior Couture in $13 Billion Deal

[Benn98]

LVMH to Buy Christian Dior Couture in $13 Billion Deal

By Limei Hoang
April 25, 2017 07:17

The company said in a statement that the move would be made through a simplified public offer by the Arnault Family Group for Christian Dior shares.

PARIS, France — LVMH announced on Tuesday that it plans to integrate the entire Christian Dior brand within the luxury group, as part of a two-pronged strategic project to strengthen its fashion and leather goods division, in deal valued at around $13 billion.

The company said in a statement that the move would be made through a simplified public offer by the Arnault Family Group for Christian Dior shares — that it does not currently hold — and take form of a primary offer consisting of €172 per share in cash and 0.192 Hermès International shares for each Christian Dior share, and would be completed by two secondary offers, in cash and in Hermès shares respectively.

The deal would mean LVMH, which already owns Parfums Christian Dior, taking ownership of Christian Dior Couture and its haute couture, leather, mens and women's ready-to-wear and shoes businesses.

Revenue for Christian Dior Couture has doubled over the past five years and its profitability has improved over the same period, with an increase in profit from recurring operations of 24 percent per year.

It adds a strong brand to the LVMH portfolio at a reasonable valuation.

Bernard Arnault, chairman and chief executive, said the move illustrated the commitment of his family group towards LVMH and its brands. “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,” he said in a statement.

Arnault and his family have offered to buy the 26 percent of Christian Dior it doesn't own for around €12.1 billion ($13.2 billion), resulting in a €6.5 billion deal.

The move would fuse together the entire Dior brand, creating further opportunities between its Christian Dior Couture and Parfums Christian Dior and would be accretive to LVMH earnings per share from the first year.

Luca Solca, head of luxury goods at Exane BNP Paribas, said he sees a number of positives in the deal. "It adds a strong brand to the LVMH portfolio at a reasonable valuation and on an accretive basis," he said. "It [also] reduces the risk of LVMH potentially buying 'trophy assets' at the expense of ROIC dilution."

LVMH expects the filing of the proposed offer by the end of May, with the acceptance period lasting around three weeks.

Source: https://www.businessoffashion.com/articles/news-analysis/lvmh-to-buy-christian-dior-couture-for-13-billion?utm_source=Subscribers&utm_campaign=450429ea31-breaking-lvmh-to-buy-christian-dior-couture-for-13&utm_medium=email&utm_term=0_d2191372b3-450429ea31-417355313

 

[Street_a_Licious]

i basically understand this as the Arnault family giving itself money?

 

[Lola701]

^^
Yes basically...

To be honest, i've never understood why they didn't made it before. Maybe they wanted some sort of financial stability for all their major house before doing it.
I wonder if this move will change something in their strategy for Dior.

So that will make Dior the 2nd biggest brand after LV and before Fendi.