French luxury-goods makers LVMH and Hermès International agreed to a truce after nearly four years of courtroom battles, striking a deal under which Hermès will remain under family control and LVMH owners will walk away with potential hefty gains, the Wall Street Journal reported.
The surprise settlement unveiled Wednesday calls for LVMH to relinquish its 23 percent interest in Hermès, a stake worth about US$8.4 billion. In turn, Hermès will withdraw the legal complaints it had filed against its bigger rival, the report said.
The peace accord will end speculation that LVMH chairman Bernard Arnault will attempt to buy Hermès in the coming years.
Under the settlement, LVMH has committed to give its shareholders all of the Hermès shares it owns by Dec. 20. In a domino-type transaction, LVMH holding companies such as Christian Dior SA will in turn hand over the Hermès shares to their own shareholders. Groupe Arnault, the family holding company of Arnault, will be left with about 8.5 percent in Hermès.
In addition, LVMH, Christian Dior and Groupe Arnault have pledged not to buy any Hermès shares in the next five years, according to the report.
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