Moët Hennessy Louis Vuitton (LVMH), the French multinational luxury goods conglomerate headquartered in Paris whose subsidiaries include Christian Dior, Fendi and Dom Pérignon, has agreed to buy Belmond for $3.2 billion, including debt to increase its presence in luxury hospitality.
First reported by Reuters, as part of the deal, LVMH said it would pay $25 per Belmond share, a 40 percent premium to Thursday’s closing price, and it's expected to close in the first half of 2019, subject to approval from shareholders and regulators.
"This acquisition will significantly increase LVMH's presence in the ultimate hospitality world," LVMH CEO Bernard Arnault said in a statement, according to CNN.
The Wall Street Journal says the deal is a good sign that luxury travel is booming after an extended downturn. It adds that the move makes sense for LVMH as it gives them a greater presence in “experiential luxury,” which they feel will help them win over younger consumers who are less likely to buy high-end goods and are more interested in luxury experiences.
LVMH already owns hotels, including Cheval Blanc in the Courchevel ski resort in the French Alps, as well as Bvgalri hotels. It will now add the 46 luxury hotels, restaurants, trains and river cruises in 24 countries that are owned, partly owned or managed by Belmond, including Venice’s Hotel Cipriani, Belmond Sanctuary Lodge in the Machu Picchu citadel, Hotel Splendido in Portofino on the Italian riviera and the Copacabana Palace in Rio de Janeiro.