In one of his biggest transactions, French billionaire Bernard Arnault announced on Tuesday plans to take over Christian Dior (EPA:CDI), in a $13.1 billion deal.
The deal will unite LVMH Moët Hennessy Louis Vuitton (OTCMKTS:LVMUY) luxury empire with Christian Dior, bringing together some of the most iconic luxury brands.
The deal will “illustrate the commitment of my family group and emphasise its confidence in the long-term perspectives of LVMH and its brands” said Bernard Arnault in a statement on Tuesday.
Following the news, shares in Christian Dior were valued at €260 a share, 15 percent above the Monday closing price.
“Reuniting Christian Dior Couture and Christian Dior Parfums, so one brand under one leadership, has to be a good thing for LVMH shareholders,” said the head of the strategy for global equities at Jupiter Asset Management, Stephen Mitchell.
“It does clean up the corporate structure.” he added.
According to Arnault, bringing the companies will make it easier for Dior to access the financing for stores and marketing as well as making it easier to move talent between perfume and fashion arms departments.
“This is an operation that shows our confidence in the French economy as well as in LVMH going forward,” said Arnault said at a press conference on Tuesday. “It will allow us to increase the synergies that already exist between LVMH and Christian Dior Couture.”
According to a statement released on Tuesday, Dior investors can choose either payment in cash or in stock of fashion rival Hermes International.
The Arnaults currently own a 47 percent stake inLVMH Moët Hennessy Louis Vuitton. The boards of Christian Dior and LVMH are both favour of the deal, according to the statement. They have appointed independent experts to review their terms and conditions.
Analysts have reacted positively to news of the deal. It has long been expected by industry observers.