LVMH will take control the €6.5 Billion euro fashion power house, Christian Dior. LVMH shares rose upwards of 4% with news of the merger between the two fashions titans. LVMH or Moët Hennessy – Louis Vuitton Announced on Tuesday, 4/25/2017 that they will follow through with plans to merged with Christian Dior and shared plans of restructuring the acquisition through simplifying or regrouping the Christian Dior brand.
The strategy to rebuild the brand will be in two parts, Part one involves the Arnaut Family group, a major holding company and a majority shareholder of LVMH, which is the world’s leading luxury products group, to buy back shares of Christian Dior from the public. They are offering a mix of €172 in cash and 0.192 of Hermès dividends per share of Christian Dior, the other options for the buyback would be €260 in cash for each Christian Dior share or 0.566 of Hermès dividends for each Christian Dior share. Part two consists of LVMH to regroup Christian Dior Couture and Parfums Christian Dior brands, the parfum brand is already a part of the LVMH group.
The acquisition will bring the once split Christian Dior house under one umbrella and strengthen the already profitable brand. Christian Dior Couture’s revenue has double over the past five years, and has continued its growth within the past twelve months, recording revenues over €2Billion, an EBITDA (earnings before interest, tax, depreciation and amortization) of €418 Million as well as profits from recurring operation of €270 Million.
LVMH, The world’s leading Luxury products group, gathers 70 prestigious brands, with 37.6 Billion euros revenue in 2016 and a retail network of over 3,940 stores worldwide.