France’s richest man, Bernard Arnault owns LVMH. The company owns some very famous fashion and luxury brands. It recently bought 14% stakes in Hermes. But some news in circulating in the market that Diageo might buy LVMH’s drinks business. The company already owns 34 percent of the stakes and now hope to takeover the entire chunk. Diageo is showing interest in Moët & Chandon, Krug, Dom Pérignon, and Veuve Cliquot Champagne brands, and Hennessy Cognac, all of them top end drinks.
According to stats, LVMH’s drinks division accounted for 16% of the company’s overall sales of about $35 billion. It seems that Goldman Sachs and Credit Suisse have advised Diageo to make an offer soon and benefit from the current situation in which, LVMH may be looking to fund a bid for Hermes. And Diageo seems to mean business. Word is out that they have already started discussing the possibilities with their bankers.
The company seems to be taking advantage of the recovering economy. Bain & Company’s consultants have published a report that says: “The recovery has been faster than expected.” Only time will tell if LVMH actually agrees to sell off its entire share to Diageo.