Look At The Way Of Mergers And Acquisitions Through LVMH And Hermes Equity Dispute

LVMH's success is to pursue "the most noble" global acquisition strategy. LVMH has a "noble" regional distribution map of luxury goods. These top brands scattered around the world are what they dream of, such as France's world-famous perfume, champagne and Cognac, which are distributed in France, the United States, Argentina, New Zealand and other places of origin. Scotland's whisky, Swiss watches, Italy leather goods, clothing and sports cars, Cuban cigars and so on are all famous, while China's liquor, ceramics, silk satin, tea and jade are all expected to become the top luxury goods.

American brands with insufficient historical accumulation tend to follow the fashion boutique line and win the new image of the new era. China, which is still a newly rising country, is the heart of the world's culture and economy. It has 5000 years of history, imperial power and rich cultural stores in 2000, and history, imperial power and culture are the core elements of the top luxury products. China is expected to become a big country of luxury goods and a big consumer country. It is positioning the global search for the most noble brand acquisition strategy, making LVMH's income diversification, hedging business risk and exchange rate risk.

Since 1987 Global In the first place, the US stock market disaster caused the US stock market value to shrink by 2 trillion US dollars. By 1997, the Asian financial turmoil had greatly weakened the purchasing power of the wealthy class in Asia, especially the number one Asian luxury buyer led by Japan, which reduced the sales volume of the luxury goods industry by more than 30%. By 2001, the Nasdaq stock market crash and the "9. 11" incident in the United States further reduced consumer information on the luxury goods industry, which was more serious than the collapse of the stock market in 1987. The appreciation of the euro and the depreciation of the yen dollar have led to a serious loss of foreign exchange in luxury brands, which dominate the Japanese and American markets. However, because of the economic downturn, the valuation of many luxury brands has greatly reduced the LVMH's acquisition consideration.

In this way, since 1987, LVMH has made 62 acquisitions. The essence of its acquisition can be summarized as follows: the use of economic cycles, the use of family conflicts, the use of capital structure or system to design loopholes, in other words, the selection of "cheap goods". In 1993, the Japanese fashion Kenzo, the French perfume and cosmetics Guerlain in 1994, the French leather brand Loewe and Celine in 1996, the retail stores in 1997, the DFS and Sephero, the Swiss watch and Hoya, the Italy leather Fendi for 1999-2001 years, the French wine ChateauYquem acquired in 1999-2000, the American fashion DonnaKaren in 2001, the Spanish distilled wine Numanthia in 2008, the brand name of the watch brand, the brand name of the wine, etc.

For example, the success of Celine reorganization, before LVMH took over, Celine sales continued to decline, the loss reached $16 million. Arnault appointed Jean-MarcLoubier, LVMH two, as the head of Celine. First, Loubier excavated the history of Celine brand and packaged the brand into a modern luxury brand, a symbol of the revival of Paris and Europe. Second, Celine previously transformed garments into a leather product with higher profits. Third, shorten the product circulation time from several months. Several weeks This not only reduces the cost of inventory, but also speeds up turnover, thereby increasing profits. It can be said that Celine is definitely a successful case of LVMH acquisition.

But the smart Hermes group has been a heavy blow to LVMH's acquisition. In October 2010, LVMH suddenly announced that it had owned the family controlled Hermes17.1% shares and became the largest single shareholder outside the Hermes family heir. Before that, Hermes was totally ignorant of all this. The Hermes family launched a counterattack immediately. In December 2010, Hermes announced that it would set up a holding company with more than 50% shares of the Hermes family heir. The holding company would collect more than 50% of its family heirs and have a preemptive right to the shares held by the family. Rely on "family solidarity" to deal with LVMH's possible takeover actions.

Finally, the long drawn out battle finally reached a settlement in the dispute over LVMH's holding of Hermes23.2& shares. According to the joint statement issued by the two sides: LVMH should allocate all its Hermes shares to shareholders, while ChristianDior, the largest shareholder of LVMH, should also allocate its Hermes share to its own shareholders. After the distribution of shares, LVMH's family holding group GroupeArnault will hold Hermes8.5% shares, but LVMH, ChristianDior and GroupeArnault jointly undertake to no longer increase Hermes shares in the next 5 years.

Referring to the case of failure, we have to mention the pain of Gucci in Arnault. Without the slightest preparedness of the Gucci group, LVMH took advantage of the loopholes in Holland law to buy Gucci group's stake, and the process was quite smooth. However, in the face of this situation, Gucci put forward a request for a full purchase, and Arnault refused because of the huge amount of capital needed for the whole acquisition. The rejected LVMH threw olive branches to Kering, expanded its capital stock and sold 42% of its equity to Kering. Kering has become the largest shareholder of Gucci, and LVMH's share in Gucci has also been diluted from 34% to 20%. Not only that, Gucci has also reached an agreement with Kering. strategy The agreement ensured the independence of Gucci company.

So the lawsuit between LVMH and Gucci and Kering also started, but after repeated negotiations, LVMH agreed to transfer the shares of Gucci group to Kering. The funniest thing is that in the process of acquiring Gucci group's equity, Kering also helped to acquire other luxury brands and let Kering jump from one retailer to the third largest luxury group in the world. It can be said that LVMH has created an excellent competitor by hand.