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LV Buys 17% Of &Nbsp Of Hermes, And Adds To It.

2010/10/30 15:57:00 117

According to the comprehensive report of Wen Wei Po in Hongkong, the world's largest luxury group LVMH (Louis Weedon) announced that it had purchased 14.2% of the famous fashion and luxury brand Hermes (Hermes), and the Hermes convertible derivative on hand, with a total holding amount of 17.1% and a total of 1 billion 450 million euros. LVMH claimed that it did not intend to control the competitor. However, the analysis concluded that LVMH would eventually make acquisitions so that the more than 50 kingdoms, including LV, Moet and Chandon, TAGHeuer watches and so on, would add more valuable members.

LVMH's massive holdings of Hermes shares reflect the revival of the luxury market.

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Bain&Co., a management consultancy, points out that luxury sales this year are expected to rise to a new high since 2007, driven by strong demand in China and the recovery of the US economy.

LVMH announced earlier this month that sales rose by 24% in the third quarter, driven by Chinese buyers.

Hermes also announced in July that sales in the first half of the year increased by nearly 23%.

LVMH issued a statement that it now has about 15 million 20 thousand shares of Hermes, and exercises derivatives.

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It can be increased to about 18 million 20 thousand shares after changing shares.

LVMH originally controlled less than 5% of Hermes shares and became the largest shareholder outside the Hermes family after its holdings.

The statement also stated that the goal of LVMH is to "become a long-term shareholder of Hermes" and to preserve the "family and French characteristics" of Hermes.

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The group said it would give full support to Hermes's founder family and management.

Hermes is controlled by the founder family. The family members control about 72% of the shares, while the rest are publicly issued.

In May 1st, the death of Hermes chief executive, Dimma, prompted speculation that family members would sell shares in the company, and Hermes shares soared to 77% since then, and 176 euros in Paris stock market last Friday.

Arnaud, the 61 year old LVMH chairman, is the richest man in France. Although Hermes is a rival in the market, he often praises Hermes, and has repeatedly hinted that he is interested in acquiring the other party in the past two years. Solca, a Sanford Bernstein analyst who specializes in luxury market, believes that the increase in LVMH will take the lead in the future acquisition of Hermes, and that LVMH belongs to the category of "mass luxury" to a large extent, while Hermes focuses on more high-end products, which can complement the LVMH.