The deal, announced Tuesday morning, sees the Arnault family making an offer on the publicly held Christian Dior shares it does not already own and regrouping the entire Dior brand within LVMH as part of its two-headed strategic plan to further solidify its luxury offering.
Shares of LVMH Moet Hennessy Louis Vuitton SE (LVMUY) and Christian Dior SA ( CHDRY ) were gaining around 3 percent and 12 percent, respectively, in Paris after the announcement of LVMH's planned buy out of the luxury brand.
- At the same time, LVMH will buy Christian Dior Couture from Christian Dior for an enterprise value of 6.5 billion euros.
In their announcement, LVMH headed by Bernard Arnault announced that it would buy the 26 percent of shares of the Christian Dior pie that it doesn't now own.
Arnault's family company said the deal was also aimed at reinforcing its fashion and leather goods division. With this acquisition, LVMH will stake claim to Christian Dior Couture, which includes Lady Dior handbags, made-to-measure Dior gowns and men's and women's ready-to-wear lines.
- Based on closing prices on April 24, the offer values each Christian Dior share at 260 euros, a 15 percent premium.
"This project represents an important milestone for the Group".
LVMH said the overall deal would boost earnings per share within the first year of its completion, with the transactions expected to close during the second half of 2017. They illustrate the commitment of my family group and emphasise its confidence in the long-term perspectives of LVMH and its brands.