After last night's surprise news, today at the start of trading, Lvmh shares gain over one and a half points on the stock market. The French luxury giant has announced the acquisition from the family Loro Piana of the majority stake in the Italian leader in cashmere processing. The operation – which will have to be approved by the antitrust authorities – concerns 80% of the share capital and it's worth about two billion euros (the value of the company at 100% is 2,7 billion). The French giant, which already controls Bulgari and Fendi, in recent days he had also taken over the historic Cova pastry shop in Milan, beating out competition from Prada.
“Our family is proud to associate our name with the Lvmh group today – they said Sergio and Pier Luigi Loro Piana -. The group directed by Bernard Arnault is, in fact, the one most capable of respecting the values of our company, its tradition and the desire to offer its customers products of impeccable quality. By associating ourselves with the Lvmh group, built around a set of historic brands, Loro Piana will benefit from exceptional synergies, while always preserving their traditions".
The contract stipulates "a put option on the remaining 20% for three years“, said Jean-Jacques Guiony, chief financial officer of Lvmh, specifying that the exercise of the option will depend on some parameters such as the trend of the EBITDA. In 2013, Loro Piana should achieve sales of 700 million euros and profits before taxes, interest and depreciation, equal to more than 20% of sales.
“Loro Piana is a rare company due to the unique quality of its products – he commented Arnault -, especially its cashmere textile products, and rare for its family roots that stretch back six generations. I am very happy that Sergio and Pier Luigi Loro Piana believe that our group is the best to ensure the future of Loro Piana. In fact, we share the same values, both family and business, the permanent search for quality and I am convinced that our group can make a strong contribution to the future of Loro Piana which has great potential".
The Loro Piana family began the wool and textile business in the early 19th century, and in April 1924 Pietro Loro Piana founded the Loro Piana company in Quarona Sesia in Italy. His work is now carried on by Sergio and Pier Luigi Loro Piana. Under their management, Loro Piana has become the first artisanal company in the world in the processing of cashmere and the rarest wools, developing a network of over 130 exclusive stores worldwide for the distribution of products bearing its brand.
