Arnault tightens his LVMH control with $1.6-B buying spree

Paris: French billionaire Bernard Arnault has long sought to strengthen his control over LVMH, the luxury conglomerate he founded nearly four decades ago. This year, those efforts have accelerated sharply.

Over eight months beginning in February, the 76-year-old quietly bought about ₹1.4 billion ($1.6 billion) worth of LVMH shares, according to Paris stock exchange filings. The purchases, made through holding companies, came amid a slide in LVMH's share price following weaker earnings and a broader luxury sector decline.

The sustained buying spree brings Arnault and his family closer to owning half of LVMH, which he established in 1987 and built into France's largest company, with a market capitalization of ₹302 billion. The move highlights Arnault's lifelong strategy of keeping his wealth centered on LVMH rather than diversifying.

An LVMH spokesperson declined to comment on the transactions or Arnault's motives.

According to the Bloomberg Billionaires Index, Arnault has a net worth of $195 billion. His stake in LVMH-accounting for the bulk of his fortune-stood at 49% of the capital and nearly 65% of the voting rights at the end of last year. LVMH's vast portfolio includes Louis Vuitton, Dior, Hennessy, and Bulgari.

During this year's buying campaign, Arnault purchased roughly 2.5 million LVMH shares, or about 0.5% of the company, through Financiere Agache and Christian Dior SE, a listed firm whose only function is to hold LVMH stock.

Regulatory filings show he paid an average of about ₹566 per share-and as little as ₹448 in June-compared with LVMH's ₹612 closing price on Friday. The total volume purchased through mid-September far exceeded previous years, taking place during a stretch of weaker quarterly results. The stock has since rebounded following an unexpected return to sales growth earlier this month.

Strong Convictions

"Bernard Arnault clearly has strong convictions about LVMH," said Frederic Genevrier, analyst at AlphaValue, suggesting the buying reflects Arnault's wish to secure an "absolute majority" even though he already holds nearly two-thirds of voting rights.

Genevrier noted that the ₹1.1 billion spent by Financiere Agache on LVMH shares might have been better used for diversification, estimating Arnault's non-LVMH investments at only ₹4 billion of his total fortune.

While Financiere Agache remains focused on luxury holdings via Dior and LVMH, its website also mentions a "portfolio of diversified financial investments." Arnault's other vehicles include Agache, which holds a majority stake in Paris FC and backs Aglae Ventures, a tech-focused fund with investments in Airbnb, ByteDance, Netflix, and Spotify.

Since acquiring Christian Dior in the 1980s and founding LVMH, Arnault has steadily consolidated control. A pivotal deal came in 2017, when he offered ₹12 billion to buy out Dior's minority shareholders-simplifying LVMH's structure and boosting the family's Dior stake to 97.5% from 74%. That move paid off amid a Chinese luxury boom and post-pandemic "revenge shopping," which helped propel Arnault to briefly become the world's richest person in 2022.