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LVMH Now Owns a Minority Stake in Hermes

>> Over the weekend, LVMH announced that it's agreed to buy a minority stake (17.1 percent for 1.45 billion euros, or $2 billion) in the family-controlled Hermès. The luxury conglomerate stifled any takeover speculation by saying it has “no intention of launching a tender offer, taking control of Hermès nor seeking board representation … The objective of LVMH is to be a long-term shareholder of Hermès and to contribute to the preservation of the family and French attributes which are at the heart of the global success of this iconic brand.”

But, as WWD points out, "few observers expect Arnault — who famously won control of Vuitton and LVMH in the late eighties by pitting family member against family member and ultimately launching a hostile takeover bid — will be content with a silent minority holding." And when Arnault bought a 5 percent stake in Gucci Group in 1999, he said that LVMH didn't intend to acquire any more of the company — but he ended up increasing his holding to 34 percent within a month.

A spokesman for LVMH declined to comment on the seller of the stake. Late Sunday, Hermès issued a statement saying that it was informed of LVMH’s purchase and affirming that its family shareholders “are fully united around a common business vision” and “have confirmed that they are not contemplating any significant selling of shares.”

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