Arnault Family Consolidates Control of LVMH

The family of LVMH chairman Bernard Arnault now holds 50.01% of LVMH’s capital, giving it greater control of the company, according to WWD.

While the family has long held the lion’s share of LVMH’s voting rights, until recently it held 49.77% of the company’s capital.

“With a majority of the share capital plus dominant voting rights, Arnault can approve dividends, major acquisitions, restructurings, and board appointments without needing support from other large shareholders,” wrote Scott Kerr, host of The Luxury Item podcast, on LinkedIn. “Activists or hostile bidders are essentially powerless.”

Arnault has five children, all of whom work for the company. Earlier this month, he appointed his eldest son, Antoine, who is chairman and CEO of LVMH-controlled Christian Dior, to LVMH’s executive board.

The news of the Arnaults’ majority stake comes as investors have been pressing the 76-year-old Bernard to spell out who will succeed him, according to Reuters. In that article, Kedge Business School professor Eric Pichet said that leaving the issue open creates a “time bomb. There are always tensions in a second generation. And when you are five, it can’t be avoided.”

(Photo courtesy of LVMH)