The chairman and CEO of LVMH, Bernard Arnault, has reportedly acquired a personal equity stake in Richemont, the parent company of Cartier which is controlled by South African billionaire Johann Rupert.
According to reports of the French billionaire’s investments, the shareholding is described as “small” and part of a broader family-owned portfolio of publicly listed companies.
The exact size of the stake remains undisclosed.
Despite the intrigue surrounding this move, Arnault is said to intend to hold the stock solely as an investment.
Following the disclosure, Richemont shares experienced a 3.1 % rise in Zurich trading, although they have declined 2.4% over the past year. Meanwhile, LVMH saw a 0.7 % increase in Paris.
Based on Forbes data, the LVMH billionaire is $2.5 billion richer today alone putting his net worth at $199 billion while Johann Rupert has recorded $500 million addition pegging his net worth at $12 billion.
What to know
LVMH, a leading global purveyor of high-end goods and Europe’s third-most-valuable company has a market capitalisation of approximately €366 billion ($391 billion). Richemont’s market value is about 84.7 billion Swiss francs ($91.3 billion).
The investment may raise questions about Arnault’s intentions. Richemont has robust defenses against unwanted suitors, with Rupert controlling 51% of the voting rights despite owning only 10.2 % of the capital. Rupert, 74, has repeatedly emphasized his commitment to maintaining the group’s independence. As of the latest annual report, no other significant shareholders hold at least 3% of the voting rights in Richemont.
Arnault, 75, has previously lauded Richemont’s Cartier and Van Cleef & Arpels brands, as well as Rupert’s leadership. “Let me finish on Richemont and Monsieur Rupert who I consider to be an exceptional leader,” Arnault said at LVMH’s annual results presentation in January. “I have no desire to disturb his strategy… if he needs support to maintain his independence, I will be there.”
Richemont announced in May 2024 the acquisition of Vhernier S.p.A., securing 100% ownership of the Italian jewelry house. This acquisition is part of Richemont’s ongoing strategy to strengthen its position in the high-end jewelry market.
Additionally, Richemont has acquired a controlling stake in Gianvito Rossi, the esteemed Italian shoemaking Maison. This transaction, conducted privately, marked another expansion for Richemont into the luxury footwear sector. Gianvito Rossi, the founder, CEO, and creative director of the brand, will retain a stake and continue to lead the creative and developmental direction of the Maison in collaboration with Richemont.
What we know
This investment recalls LVMH’s previous strategy when it stealthily accumulated a 23 % stake in Hermes International SCA using equity derivatives. Despite calling the move “friendly,” the Hermes family fought back, and LVMH eventually relinquished its holding.
LVMH’s diverse portfolio includes brands such as Loewe, Celine, Fendi, Sephora, Dom Perignon, and Moët & Chandon. Its $16 billion acquisition of Tiffany & Co remains the largest deal in the luxury sector to date.
A potential takeover of Richemont by LVMH could draw antitrust scrutiny due to overlapping interests in luxury jewellery brands.
