LVMH Acquires Rimowa for $716 Million

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The world’s largest maker of luxury-goods is acquiring an 80 percent stake from Dieter Morszeck, said LVMH in a statement. The agreement includes taking over suitcase maker Rimowa for US$716 million, with Alexandre Arnault in charge of LVMH’s first German label alongside Morszeck.

24-year-old Arnault, who is the son of LVMH chairman Bernard Arnault, 67, will be the third of Arnault’s five children to assume a leading role at the manufacturer of Marc Jacobs and TAG Heuer.

“LVMH is looking for brands that have heritage and a unique position,” said Mario Ortelli, a senior analyst at Sanford C. Bernstein. “They know that when they acquire these brands they can accelerate their development.”

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According to Ortelli, the acquisition marks an interesting addition to the luxury group’s portfolio, where Rimowa can share its best practices and integrated luggage technology.

The move marks the luxury group’s largest acquisition since cashmere maker Loro Piana in 2013, with LVMH shares rising briefly at 2.7 percent when news first broke. According to Ortelli, being part of LVMH will give Rimowa an advantage in getting the best locations in shopping malls more easily, in addition to benefiting from discounted advertising,

LVMH on the other hand will add some US$450 million to its annual revenue from the recent acquisition.

“Rimowa is a brand with a unique heritage. We share with Dieter Morszeck the same passion for innovation and a common desire to offer high quality products from a European tradition of craftsmanship,” said Bernard Arnault in a statement.

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