Luxury powerhouse LVMH Moët Hennessy Louis Vuitton announced today that it will fully own the hallowed house of Christian Dior, in one of the biggest business deals in the massive fashion conglomerate's history. The company has owned the house's fragrance business, Parfums Christian Dior, for a while now. But with this $13.1 billion deal, LVMH will gain complete control over the 74-year-old French fashion label.
LVMH's relationship with Dior began in 1984, when Bernard Arnault, currently the fashion empire's CEO, struck a deal with Boussac, a textile group group that included Dior. Before today's sale, LVMH owned the majority (nearly 75%) of Dior's business. Now, it will add the Parisian label's haute couture, men's and women's ready-to-wear, leather, and shoe businesses to its roster. The luxury conglomerate is using a mix of cash and Hermès shares to buy the remaining 25.9%. The move brings Dior shares up to $282 a share, representing a 14.7% increase over Monday's closing price, and Arnault's fortune shot up to $5 billion in mere hours.
"The corresponding transactions will allow the simplification of the structures, long requested by the market, and the strengthening of LVMH’s fashion and leather goods division," Arnault said of the deal in an official statement. According to the statement, the decision to acquire Christian Dior was unanimous, with independent experts reviewing the terms. Other luxury brands under LVMH's control include Céline, Fendi, Givenchy, Louis Vuitton, Marc Jacobs, and more.
The purchase will make LVMH's dominance in the luxury market even stronger, and will likely counter the effects of a waning luxury market, considering Dior has really been on a roll recently. The luxury house's revenue has doubled in the past few years — first under the leadership of Raf Simons, and then Maria Grazia Chiuri — with its reported revenue in excess of $39.5 billion. LVMH's acquisition of Dior is expected to close in the second half of 2017.
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