|
RAPAPORT... LVMH and Hermès reached a conciliatory agreement to end an ongoing shareholding conflict between the two competing luxury groups. LVMH had amassed a 23 percent stake in Hermes during the past four years, which resulted in a fine in 2013 for improper disclosures and led Hermés' executives to take legal action fearing a takeover. In June, Hermes' executives filed an opinion during its annual shareholder meeting, telling LVMH to sell, expressing a need to operate fully independently and without intervention or threat.
Hermés' market capitalization is about $37 billion, or the third largest luxury brand behind LVMH and Richemont. According to a joint statement by LVMH and Hermés, LVMH will distribute all shares to its shareholders, on the understanding that its largest shareholder, Christian Dior, will in turn distribute the Hermès shares it receives to its own shareholders.
LVMH, Christian Dior and Groupe Arnault have also agreed not to acquire any shares in Hermès for the next five years. The distribution of Hermès shares, approved by the boards of LVMH and Christian Dior, will be completed no later than December 20, 2014. Following this distribution, Groupe Arnault will hold about 8.5 percent of the capital of Hermès International.
|