Bernard Arnault’s LVMH sets sights on South African billionaire Johann Rupert’s Richemont

LVMH Moet Hennessy Louis Vuitton, a leading luxury goods conglomerate helmed by French billionaire Bernard Arnault, is reportedly pursuing the acquisition of Switzerland-based luxury goods holding company, Richemont, led by South African billionaire Johann Rupert.

With its impressive collection of premium brands such as Chloe, Dunhill, Alaa, Cartier, and Delvaux, Richemont has secured its place as the fourth-largest luxury company globally, boasting a market capitalization of almost $79 billion.

According to Swiss newspaper Finanz und Wirtschaft, insiders have suggested that LVMH is actively seeking to expand its jewelry segment by acquiring Cartier, a luxury jewelry brand owned by Richemont.

The acquisition may face hurdles as Johann Rupert, the South African billionaire who leads Richemont, has shown resistance to potential takeovers.

Rupert has taken steps to secure his position in the company, including appointing his son Anton to the board to ensure a long-term strategic vision for the group.

As a result, LVMH’s pursuit of Cartier may not yield the expected outcome.

Richemont recently announced an 18-percent increase in sales at actual exchange rates for the nine-month period ending Dec. 31, 2022, according to its recent trading update for the third quarter of its fiscal year 2023.

The group’s sales have surpassed €15 billion ($16.3 billion), up from €12.77 billion ($13.9 billion) during the same period last year, showcasing substantial growth.

The surge in sales can be attributed to the rise in sales in Japan, which soared from less than €855 million ($929 million) in 2022 to almost €1.29 billion ($1.4 billion), along with better-than-expected sales in Europe, despite geopolitical tensions sparked by the Ukraine war.

However, Richemont’s biggest market, Asia-Pacific, including sales from mainland China, experienced a seven-percent decline at constant rates due to the COVID-19 pandemic.

The virus swept through China’s major financial centers and hubs, such as Shanghai, leading to lockdowns that impacted millions of people.