Christian Dior holding company soars by over 17 percent on Paris Stock Exchange

Paris, France - The Christian Dior holding company gained over 17 percent on the Paris Stock Exchange on Thursday. This follows the announcement of a proposed reorganisation of the structure that controls the global luxury giant LVMH.

At around 7:40am GMT, Christian Dior SE, LVMH's main shareholder with 42.47 percent of the shares, was up 17.42 percent at 428.80 euros. LVMH was up 0.96 percent at 400.70 euros, while the CAC 40 index was down slightly by 0.14 percent.

According to a proposal presented to Christian Dior's board of directors, the Arnault family intends to merge its holding companies to “ensure the long-term stability of its control” over the group. Christian Dior announced this in a statement on Wednesday.

This new reorganisation is expected to result in the creation of a single company that will control LVMH.

This will be achieved through several merger and transformation operations. Under these terms, the intermediate holding company Christian Dior will be transformed into a limited partnership with shares. Bernard Arnault's eldest son, Antoine, has been the managing director of this holding company since 2022.

Currently, Agache holds 100 percent of Financière Agache. Financière Agache holds 96 percent of the share capital and 97.10 percent of the voting rights in the intermediate holding company Christian Dior. It also holds 6.77 percent of the share capital and 8.49 percent of the voting rights in LVMH.

After the merger of Financière Agache into Agache, it is planned that Agache will be merged into Christian Dior. Christian Dior will then be simultaneously transformed into a limited partnership with shares and renamed Agache.

The future company will hold a direct stake in LVMH of 49.76 percent of the share capital and 65.55 percent of the voting rights.

The transaction would thus consolidate the majority of the Arnault family group's stake in LVMH, amounting to 50.33 percent of the share capital and 66.27 percent of the voting rights.

The limited partnership structure is known for its characteristics that facilitate succession within a family business. It also allows for the separation of management and capital ownership and serves as a deterrent against hostile takeover bids.