Silk holdings

25 October 2010 By Pierre Briancon

LVMH, the French maker of Vuitton bags and other luxury goods and drinks, has acquired a 14 percent stake in Hermès International, the exclusive familycontrolled group. LVMH owner Bernard Arnault says he doesn t want control. But he mostly doesn t want rivals to get near Hermès.

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LVMH, the world's largest luxury goods company, said on Oct. 23 that it had bought a 14.2 percent stake in Hermès International, the familycontrolled maker of silk scarves and highend leather goods.

LVMH also said in a release that it held "derivative instruments" that would allow it to up its Hermès stake to 17.1 percent. LVMH said it spent 1.45 billion euros on its investment.

The company said it wants to "be a longterm shareholder of Hermès and to contribute to the preservation of the family and French attributes which are at the heart of the global success of this iconic brand". It said it won't seek control nor demand board representation.

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