Bernard Arnault plans to turn Agache, a family holding company that owns LVMH, into a limited partnership, in order to perpetuate the entrepreneur and his five children’s control of the world’s number one luxury.
Bernard Arnault prepares to succeed him by perpetuating family control of the global leader in luxury LVMH by reorganizing Agache into a limited partnership. “The LVMH Group is a family group,” Bernard Arnault recalls in a press release published on Thursday by Ajach. The transformation into a limited partnership, he said, “does not change its existing stake, makes it possible to ensure the long-term sustainability of the company’s control of the LVMH group.”
This new structure should allow for the long-term sustainability of family control for the controlling shareholder within Christian Dior and LVMH. Control of Agache will be exercised by Agache Commandité SAS, an entity whose capital will be held equally by Bernard Arnault’s five sons, and identify the holding company in its press release.
The five children of the businessman are already working in the LVMH group. Delphine Arnault, 47, is deputy general manager of Louis Vuitton and Antoine Arnault, 45, is head of image and communications at LVMH and general manager of Berluti. Alexander, 30, executive vice president of Tiffany, Frédéric, 27, CEO of Tag Heuer, and Jean, 24, director of marketing and watch development at Louis Vuitton.
Agache will remain wholly owned by the Arnault family group, now acting as the sponsor. Bernard Arnault will be the first and only general partner of Agache, namely that he will be the leader of the limited partnership. “After this”, the general partner will be the Agache Commandité SAS, whose capital will be borne equally by the five heirs.
Sponsorship is recognized for its characteristics that facilitate the transition within a family business. It makes it possible to separate management from equity ownership and also serves as a deterrent against hostile takeover offers. Lagardère has been in use for a long time and is present in a few very rare companies such as tire manufacturer Michelin, luxury brand Hermès, or even Sauvéole, the main company of the Bolloré group. Through this process, Bernard Arnault has not appointed his successor and does not intend to extradite him in the near future.
LVMH CEO age pushed back to 80
At its annual general meeting, the minimum age for LVMH’s CEO was pushed back from 75 to 80, allowing its 73-year-old CEO to extend his term. It was not proposed to change the minimum age of the President of the Republic, which is 75 years old, according to the law. Bernard Arnault’s family group held in April at the general meeting 47.83% of the LVMH’s share capital and 63.89% of the voting rights.
In 2021, LVMH recorded €64.2 billion in sales and a net profit of €12 billion. Half-year results for 2022 are expected to be announced for the first place in the luxury sector on Tuesday after the first quarter of the 2021 momentum which recorded sales of 18 billion euros, an increase of 29% compared to the same period the previous year.