LONDON — The LVMH Moët Hennessy Louis Vuitton luxury empire and the French billionaire Bernard Arnault announced on Tuesday a series of moves to take over Christian Dior, in a $13.1 billion deal to consolidate control over the Parisian fashion house.
The transaction would simplify LVMH’s relationship with the 70-year-old fashion house by buying out minority shareholders. LVMH, the world’s biggest luxury group by revenue, already owns Parfums Christian Dior, and it would take ownership of Christian Dior and its haute couture, leather, men’s and women’s ready-to-wear, and shoe businesses.
As part of the proposal, one of the largest for the luxury goods conglomerate, the Arnault family offered to buy the 25.9 percent of Dior it does not already own. The family would hand over a mix of cash and Hermès shares, valuing Dior at 260 euros, or $282, a share, LVMH said. This represents a 15 percent premium over the closing price on Monday.
The LVMH fashion and leather goods division would then buy Christian Dior Couture for an enterprise value of €6.5 billion.
“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,” Mr. Arnault said in a statement. He added that the deal “illustrated the commitment of my family group and emphasizes its confidence” in LVMH’s long-term prospects.
The Arnault family owns a 47 percent stake in LVMH, whose brands include Louis Vuitton, Fendi and Céline. The boards of Christian Dior and LVMH are unanimously in favor of the deals, the statement said, and they have appointed independent experts to review their terms.
LVMH continues to outperform the wider luxury market, which has faltered in recent years in the face of fears of geopolitical conflict and currency fluctuations. Last month, rebounding demand for luxury goods in China and Europe pushed its first-quarter sales to €9.88 billion, a 15 percent increase over the same period a year earlier and far beyond estimates.
Analysts reacted positively to news of the deal, which had long been expected by industry observers. The transaction is expected to be closed the second half of this year, and it is projected to increase LVMH’s earnings per share within the first year of its completion, the statement announcing the agreement said.
“The deal adds a strong brand to the LVMH portfolio at a reasonable valuation,” Luca Solca, managing director of luxury goods at Exane BNP Paribas, wrote in a note to investors.
Over the past five years, revenue at Christian Dior has doubled and profitability has improved. For the 12 months ended March 31, revenue exceeded €2 billion and profit from recurring operations was around €270 million.
The Arnault family’s decision to offload Hermès shares comes nearly three years after the family received shares in the Paris-based luxury leather goods house following a controversial effort by LVMH to build a stake in the company.