LVMH Chief Arnault acquired stake in industry Rival Richemont

Details on the stake purchase

Bernard Arnault, Europe's richest man and chairman of the high-end conglomerate LVMH, has acquired a stake in Richemont, their luxury competitor, (according to Bloomberg) on Tuesday 25th June. LVMH is known for its prestigious brands like Louis Vuitton, Christian Dior, Hublot, Tag Heuer, and Dom Perignon and the company has a history of acquiring stakes in rival luxury companies. Notably, in 2010, LVMH acquired a stake in Hermes, although it eventually relinquished it in 2014 after resistance from Hermes' family owners.

Although I would love to know, the specifics of his brand-new shareholding in Richemont, the owner of Cartier jewelry, as well as his intentions behind the investment are still unclear. Bloomberg indicates that this stake is part of a broader investment portfolio owned by the Arnault family in various publicly listed companies.  Analysts commented that the investment appears to be just a personal stake coming from Arnault's admiration for Richemont’s jewelry businesses.

What is next

Richemont includes Swiss watchmakers IWC, Piaget, and Jaeger-LeCoultre and these brands could pose a challenging takeover target if Arnault has more ambitious intentions than just investing.

For reference, Richemont is controlled by Chairman Johan Rupert who owns 51% of the voting rights: " "Richemont's Johann Rupert has repeatedly said the company is not for sale and he has no interest in any sort of tie-up."

Despite the uncertainty around the acquisition, Richemont's shares saw a 2.8% increase following the news while its has been rising roughly 21% during 2024.