The bitter feud that has pitted two of France’s most storied luxury names against each other for years has finally come to end.
LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury conglomerate with brands ranging from jeweler Bulgari to handbag maker Fendi, agreed on Wednesday to give up most of the controversial 23% stake in Hermès it had quietly built up since 2007 and not buy any new shares in its smaller rival for five years.
The deal, proposed by the Commercial Court of Paris and agreed to late Tuesday by both luxe groups, all but eliminates the prospect of a takeover of the 177 year-old Hermès, famed for its $10,000 Birkin handbags, and one of the few remaining stand-alone French luxury companies.
In a statement, the companies’ executives expressed “their satisfaction that relations between the two groups, representatives of France’s savoir-faire, have now been restored.”
BERNARD ARNAULT |
LVMH, an acquisitive company which has bought up some 60 brands in the last 20 years, had long maintained it came in peace and had no intention of taking over Hermès, a claim that was met with skepticism by Hermès patriarch Bertrand Puech, furious at having the company’s arch-rival be it's top outside investor.
BERTRAND PUECH |
LVMH stands to make a capital gain of around 3 billion euros on its Hermès holdings, Bloomberg reported, citing an unnamed source.
The distribution of Hermes shares will be completed by Dec. 20, 2014, the companies said.
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