LVMH, owner of TAG Heuer, Hublot and Zenith, has acquired 17.1% of French fashion house Hermès for approximately $2 billion. Founded in 1837, Hermès is perhaps best known for scarves, ties and handbags, though the company also produces a range of fashion watches, as well as fine watches in its Pièces d’exception line.
Hermès CEO Jean-Louis Dumas passed away on May 1, leading to speculation that the members of the founding family might be willing to sell, though the family has issued a statement confirming their desire to retain control. The family owns about 73% of the company, and Hermès shares have doubled since May 1. The seller of the LVMH stake has not been identified. For its part, LVMH says that it does not intend to take control of the company, though many analysts believe LVMH is positioning itself for an eventual takeover.
Following the LVMH announcement, Hermès shares climbed 26.65 euros or 15% to 202.85 euros in Paris trading, valuing the company at 21.4 billion euros, or about $29.7 billion.