Published: Tue, April 25, 2017
Business | By Pat Ferguson

LVMH to take over Christian Dior for 6.5 billion euros

LVMH to take over Christian Dior for 6.5 billion euros

The world's top luxury company LVMH said Tuesday it plans to buy Christian Dior Couture, a wholly-owned unit of Christian Dior SA, for 6.5 billion euros (US$7.0 billion).

LVMH has announced this morning that it is to integrate the entire Christian Dior label into the luxury group.

By making it a wholly-owned subsidiary, LVMH would be able to harness its "high growth potential" of Christian Dior Couture, the statement said. For the last 12 months which ended March 31, Christian Dior reported revenue in excess of 2 billion euros, with an operating profit of 270 million euros.

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In Paris, LVMH shares were gaining 3.05 percent to 221.25 euros, and Christian Dior shares were gaining 12 percent to 253.90 euros. The family owns 74.1% of Christian Dior, which in turn owns a controlling stake in LVMH. "It will allow for the regrouping of Christian Dior Couture and Parfums Christian Dior brands", the statement continued.

"The development of Christian Dior Couture will be notably supported over the coming years by a new creative momentum and significant investments already completed, notably in America, China and Japan".

Any confusion is forgivable since Bernard Arnault, the chairman and chief executive of LVMH, is also the chairman and majority shareholder of Dior. Under the deal, the Arnault family is offering to buy the 25.9% of Christian Dior it doesn't own for EUR260 a share, valuing that stake at EUR12 billion. The move sees LVMH, which now owns Perfumes Christian Dior, buying the Christian Dior brand and its haute couture, women's and men's ready-to-wear lines, footwear and leather goods.

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