French luxury goods group LVMH said on Saturday that it was buying a minority stake worth 1.45 billion euros (US$2 billion) in family-controlled handbag maker Hermes but would not seek to take over the group or influence its strategy.
The move will see LVMH - which owns champagne brand Moet, Hennessy spirits and leather goods brand Louis Vuitton - eventually hold 17.1 percent in Hermes, known for its high-end leather handbags and silk scarves.
"The objective of LVMH is to be a long-term shareholder of Hermes and to contribute to the preservation of the family and French attributes, which are at the heart of the global success of this iconic brand," LVMH said in a statement on Saturday.
LVMH said it had bought more than 15 million shares of Hermes, or a 14.2 percent stake. The surprising move is likely to trigger questions over the intentions of LVMH's CEO Bernard Arnault. The French businessman took control over LVMH in 1990 after three years of internal power struggle and has often expanded its reach through acquisitions of iconic brands.
Hermes has been the subject of market talk over whether some family members would sell shares, altering the group's capital structure or even making it a takeover target.
It was not immediately clear how LVMH had built up such a large stake in Hermes, or whether it had bought shares on the open market or from family members. Based on its statement, LVMH seems to have acquired the 17.1 percent stake for an average price of 80.50 euros per share.
