PARIS -- The magnate behind LVMH is to incorporate Christian Dior into his luxury goods empire in a multibillion-dollar deal.
It's the latest business coup for businessman Bernard Arnault, who has expanded his LVMH empire to include dozens of leading luxury brands -- from high-end champagne and whiskies, to exclusive Vuitton handbags, Kenzo and Givenchy perfumes and Bulgari and TAG Heuer watches. Dior Couture, launched in 1946 and seen as the pinnacle of Paris style, would be a starring jewel in his empire.
Shares in Christian Dior and LVMH Moet Hennessy - Louis Vuitton rose after Tuesday's long-awaited deal. The public offers values Dior at 260 euros per share. Shares in Dior spiked 11.8 per cent to 253.65 euros by mid-morning Tuesday, while LVMH shares were up 3 per cent at 221.25 euros.
According to the announcement, LVMH, which already owned Christian Dior cosmetics and perfumes, would buy Christian Dior Couture, its fashion business, for 6.5 billion euros (US$7.1 billion). In addition, the Arnault Family Group is making a public offer for the Christian Dior shares it doesn't currently hold.
The hope is that combining Dior's entities under one roof and simplifying internal activities, savings will be generated.
The statement says the boards of both companies approved the transactions on Monday. The proposed deal will still need regulatory approval and consultations with workers. The companies also hope to issue the public offer in June, and finalize the purchase of Dior Couture in the second half of this year.
The companies laid out their hope that Dior's fashion revenues and profit, which have risen in recent years, will be a "source of growth" for LVMH, particularly with development in the U.S., China and Japan.
