Luxury juggernaut LVMH folds Dior into its stable of brands

[PARIS] French billionaire Bernard Arnault moved to consolidate control over Christian Dior for about 12.1 billion euros (S$18.1 billion), folding much of the fashion house's operations into the LVMH luxury empire in one of his biggest transactions.

The deal, which will unite ownership of one of the most iconic fashion brands under one roof for the first time in decades, values Paris-based Christian Dior SE at 260 euros a share, according to a statement Tuesday. That's 15 per cent above the Monday closing price.

Under a series of planned transactions, LVMH will get Christian Dior Couture, which makes the Lady Dior handbag, made-to-measure gowns and men's and women's ready-to-wear fashions. Arnault's family holds a 47 per cent stake in publicly traded LVMH, which already owns Dior perfumes and beauty thanks to a 1960s-era deal to raise capital for the then-troubled fashion brand.

The deals "illustrate the commitment of my family group and emphasize its confidence in the long-term perspectives of LVMH and its brands," Arnault said in the statement.

Dior investors can choose payment in cash or in stock of fashion rival Hermes International, according to the statement. The boards of Christian Dior and LVMH are unanimously in favour of the deals, and have appointed independent experts to review their terms, according to the statement. The Arnaults received shares in Hermes in 2014 after a controversial effort by LVMH to build a stake in the company.

LVMH, whose full name is LVMH Moet Hennessy Louis Vuitton SE, is paying about 15.6 times earnings before interest, tax, depreciation and amortisation over the past year for Christian Dior Couture.

Designer Christian Dior founded the fashion house in 1946 with backing from businessman Marcel Boussac, later expanding into fragrances, watches and accessories and opening stores in New York, London and Tokyo. Designers Pierre Cardin and Yves Saint Laurent also worked for the house early in their careers. Dior died in 1957.

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