LVMH Is Buying Christian Dior Couture for $7.1 Billion [Updated]

Dior had previously operated the house's robust couture business itself.
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Photo: Peter White/Getty Images

Photo: Peter White/Getty Images

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Changes are coming to Dior's robust haute couture business, just five days after the French house re-showed Creative Director Maria Grazia Chiuri's Spring 2017 Haute Couture collection in Tokyo. 

In an announcement released on Tuesday, LVMH revealed that it's set to purchase Christian Dior Couture from Christian Dior SE and integrate the category into the greater Dior brand, much of which it already operates. And for a brand as steeped in the fashion narrative as Dior, its price doesn't come cheap: the luxury goods conglomerate will pay €6.5 billion (or roughly $7.1 billion) for it.

But haute couture isn't the only Dior business LVMH is obtaining: in a roughly $13-billion deal (including the aforementioned $7.1 billion couture transaction), LVMH will absorb the remaining shares it had not already controlled to now own the entire Christian Dior brand; product-wise, this will involve everything from men's and women's ready-to-wear to shoes to leather, along with the aforementioned couture.

In a statement, LVMH noted that the purchase would be handled via a simplified public offer by the Arnault Family Group. The offer would consist of €172 (roughly $187) cash and 0.192 Hermès shares per each outstanding Dior share, and would be completed by secondary offers in both cash and Hermès shares.

Said LVMH CEO Bernard Arnault:

This project represents an important milestone for the Group. The corresponding transactions will allow the simplification of the structures, long requested by the market, and the strengthening of LVMH’s Fashion & Leather Goods division thanks to the acquisition of Christian Dior Couture, one of the most iconic brands worldwide. They illustrate the commitment of my family group and emphasize its confidence in the long-term perspectives of LVMH and its brands. I am delighted to announce this project today and thus continue and reinforce the development of LVMH in France and worldwide.

This move is the latest in a string of developments for LVMH, which include tapping Clare Waight Keller for the top design role at Givenchy and angling to launch an e-commerce site. Earlier this month, the group reported a 15-percent rise in revenue in the first quarter of 2017.

Update, Tues., May 23: Nearly a month after it was first reported that LVMH was poised to purchase Christian Dior Couture in a whopping, multibillion-dollar deal, WWD has confirmed that, on Monday, Bernard Arnault's family holding officially filed an offer in line with the plan announced on April 25. In a statement, LVMH said:

Based on the independent expert's conclusions, which confirm that the offer is fair and further to the release of the favorable opinion of the ad hoc committee composed of independent directors, the board directors of Christian Dior, held on May 22, 2017, has unanimously recommended that Christian Dior shareholders tender their shares to the offer.

The $7.1 billion purchase, when finalized, will make Dior the second-largest brand in LVMH's fashion division, behind Louis Vuitton.

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