LVMH Has No Further Plans to Take Over Hermes

Share price for Hermes International SCA has fallen the most in six months after French luxury goods conglomerate LVMH Moet Hennessy Louis Vuitton SA confirmed its intention of not bidding for more stocks of the family-owned handbag maker.

LVMH, the world largest luxury goods conglomerate, currently owns a 20.2 percent of Hermes shares since October 2010. Recently, there has been extensive controversy and speculation about the possibility of a complete take over of the 174-year-old Paris-based brand.

“LVMH directors are rational and lucid people. From the outset we understood that there was no possibility of controlling Hermes because the family shareholders spoke for 70 percent of the company. That aside, it would make no sense for LVMH to destabilize Hermes as it would risk compromising the success of this great company. The more this company prospers, the happier we all are as shareholders,” LVMH Deputy Chairman Pierre Gode said at the Hermes shareholder meeting on May 3 in Paris.

“Our sole objective was, and remains, to make a long-term investment in a company with recognized potential and with which we share a passion for high-quality workmanship.”

Gode’s position echoes comments made by Bernard Arnault, LVMH’s chairman, who said that his company has no desire to control Hermes.