LVMH and Hermes this week put aside their differences
in one of the most remarkable and unexpected peace
agreements in the the € 217 billion-a-year luxury industry .
The two Paris-based groups said they had finally worked
out a mechanism to wind down the 23.2 percent share in
Hermes , LVMH had built up since 2010.
The agreement , which will see LVMH distribute its Hermes
shares to its share-holders in a ratio of one share for every
21 LVMH shares they hold , is a clear victory for family
owned Hermes . The group , famed for its ultra high-end
Birkin and Kelly leather bags , feared LVMH , controlled by
French billionaire Bernard Arnault , would ultimately try to
take control . Mr.Arnault has spent the past 25 years
putting together the world 's largest luxury group , with
annual sales of more than €29 bn .
He is known for both his business talent and his ruthless
pursuit of the best known names in luxury .
But in response to LVMH's share purchase , Hermes family
members came together to set up H51 , a holding company
with 50.2 per cent of the share capital , in a move to guard
against a hostile takeover .
In spite of industry suspicions to the contrary , Mr Arnault
always said LVMH's purchase of Hermes shares was
purely a financial operation . If that is true , he can walk away
feeling fully satisfied . LVMH bought the bulk of its Hermes
shares in October 2010 at an average price of €106 .
The shares are now trading at €253...
