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FB Roundup: Arnault Family Group, Lotte Group, JAB Holdings

Arnault family restructures holdings, sells Hermes stake; Lotte Group to reduce cross-shareholdings by 73% in simplification drive; JAB Holdings luxury arm mulls sale of Jimmy Choo and Bally

Arnault family restructures holdings, sells Hermes stake
France’s Arnault family is to pay €12.1 billion ($13.2 billion) for the minority stake in iconic French fashion house, Christian Dior, it does not yet control and sell its stake in family-controlled rival Hermes.

Arnault Family Group, who controls the world’s largest luxury company LVMH, said the move was part of a two-step simplification of its holding structures in response to market demands.

The French luxury house will finance the Dior purchase through a combination of cash and by selling its remaining Hermes shares.

According to analysts, Arnault’s stake in LVMH will increase from 36% to 46% as a result of the Dior purchase.

LVMH posted revenues of €37.6 billion in 2016 and is controlled by chairman and chief executive Bernard Arnault.

 

Lotte Group to reduce cross-shareholdings by 73% in simplification drive
South Korea’s fifth-biggest conglomerate, Lotte Group, is to drastically simplify its complex holding structures.

The move comes after increasing public frustration in South Korea surrounding the structure and governance of family-controlled conglomerates, known as chaebol.

In September 2016, prosecutors in South Korea charged the chairman of Lotte Group and four of his family members with tax evasion, embezzlement, and unlawful business deals.

Lotte said the restructuring aims to improve transparency and address the circular-shareholding problem. The new structure will reduce the number of cross-shareholdings within the group from 67 to 18.

Chaebol, often have group companies hold minority stakes in each other in chains of circular shareholdings.

Such structures let founding family members maintain control over units with only a relatively small investment

Lotte, with an annual revenue of about $74 billion, has been run by the Shin family since it was established by Shin Kyuk-ho in 1948.

 

JAB Holdings luxury arm mulls sale of Jimmy Choo and Bally
JAB Holdings, the investment vehicle of Germany’s Reimann family, has put iconic footwear brand Jimmy Choo up for sale and is holding a strategic review of Switzerland’s leather goods company Bally.

The review of JAB Luxury’s holdings follows a string of acquisitions by Germany's billionaire Reimann family, who have built up an empire of coffee and food chains in recent years.

Earlier this month, JAB signed a $7.5 billion deal to acquire bakery chain Panera Bread—the biggest restaurant deal in United States history.

JAB Holdings is controlled by the second generation of Germany’s Reimann family: Renate Reimann-Haas, Wolfgang Reimann, Stefan Reimann-Andersen, and Matthias Reimann-Andersen.

In 2016 JAB Holdings reported revenues of €1.39 billion ($1.52 billion).
 

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