LVMH Moet Hennessy Louis Vuitton SE (LVMUY) shares leaped to the top of the market in Paris after it said it would buy out the minority interest held by Christian Dior SA (CHDRY) in a €12.1 billion ($13.16 billion) deal it said would lift its earnings profile.
The Arnault Family Group, which controls LVMH, said it would purchase all the shares of Christian Dior it doesn't already own for €172 each in cash and 0.192 in Hermes International shares. The offer would value Dior shares at €260 each, the company said, a 14.7% premium from its Monday closing price. LVMH's Fashion & Leather Goods division will also purchase Christian Dior Couture for €6.5 billion.
"This project represents an important milestone for the Group. The corresponding transactions will allow the simplification of the structures, long requested by the market, and the strengthening of LVMH's Fashion & Leather Goods division thanks to the acquisition of Christian Dior Couture, one of the most iconic brands worldwide," said chairman Bernard Arnault. "They illustrate the commitment of my family group and emphasize its confidence in the long-term perspectives of LVMH and its brands. I am delighted to announce this project today and thus continue and reinforce the development of LVMH in France and worldwide."
LVMH shares gained 4.22% by mid-day in Paris to change hands at €223.75 after hitting an all-time high of €225.20 earlier in the session. Dior shares were marked 11.95% higher at €253.95 each.
