LVMH to consolidate hold on Dior in multibillion-euro deal

The magnate behind the LVMH luxury empire is seeking to strengthen control over Christian Dior in a multibillion-dollar deal combining the fashion industry heavyweights.

PARIS-French billionaire Bernard Arnault on Tuesday announced a plan to take full control of Christian Dior SE, saying his family is proposing to pay EUR12 billion ($13.04 billion) for the stake in the fashion company it doesn't already own. LVMH shareholders will also welcome a streamlined empire. Looking at turnover, LVMH is the world's largest luxury group.

By making it a wholly-owned subsidiary, LVMH would be able to unlock its "high growth potential", it said.

The deal would be accretive to LVMH earnings per share from the first year. "It will allow for the regrouping of Christian Dior Couture and Parfums Christian Dior brands", the statement continued.

Christian Dior Couture is now considered an independent affiliate of LVMH despite having the same controlling shareholder. Revenue at Christian Dior has doubled over the last five years, as profitability has soared during the same timeframe.

- Semyrhamis now owns 74.1 percent of Christian Dior's share capital and 84.9 percent of its voting rights.

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- Based on closing prices on April 24, the offer values each Christian Dior share at 260 euros, a 15 percent premium.

The boards of directors of Christian Dior and LVMH were "unanimously favourable" to the plans, LVMH said.

"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".

Mr Arnault said the move illustrated his family's commitment and confidence in LVMH and its brands.

Analysts also hailed the long-awaited deal.


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