LVMH Moet Hennessy Louis Vuitton, the world's largest luxury goods group which is controlled by the Arnault family, announced 23 October that it has taken a €1.45 billion share in fellow family company Hermes International.
LVMH, which owns brands such as Dom Perignon, TAG Heuer and Marc Jacobs, purchased 14.2% of luxury company Hermes and also plans to convert derivatives LVMH holds in Hermes into shares, giving it a total of 17.1% of Hermes capital.
In the statement announcing the purchase, LVMH said it was not planning to launch a full bid for Hermes. LVMH also said it supports the Hermes strategy implemented by the founding Dumas family "who have made the brand one of the jewels of the luxury industry."
Bernard Arnault (pictured), family chairman and CEO of LVMH, will not seek a seat on the board of Hermes, which is 71% owned by the founding family, although it has not been disclosed if the LVMH purchase has decreased the family's holding.
The death of former Hermes CEO Jean-Louis Damas in May sparked speculation that the family might look to decrease their shareholding in the 173-year-old company, but in a statement confirming the LVMH purchase Hermes said the family remained in majority control.
LVMH began in 1987 after Arnault used his family's money to purchase Christian Dior. Daughter Delphine joined the company in 2000 and became the first woman on the board in 2003 at the age of 29. She still holds a management position and is actively involved in the fashion brands, particularly Louis Vuitton. The Arnault family own a 47% stake in LVMH through the family's holding company, Groupe Arnault.
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