French regulator will investigate Louis Vuitton’s acquisition of Hermès

The integrated media reported on November 5 that the French Financial Market Supervision Agency (AMF)** Jean-Pierre Jouyet stated on the 5th that the French M&A management rules are not strict enough. The agency plans to be on the LVMH Moet Hennessy Group. Louis Vuitton) increased the stake in Hermes International to 17.1% to investigate.

Jouyet stated that “France is usually treated in the same way as distant countries in the acquisition of another company’s shares or the transfer of ownership thresholds.” It stated that France should align with the most stringent merger and acquisition rules in Europe.

Jouyet objected to the statement of ownership on the 5th, saying that the French regulator should change the rules and require that any tool that allows one company to acquire another company’s shares should be made public.

Louis Vuitton unexpectedly announced in October that the company has increased its holding of famous fashion and luxury brand Hermes shares to 17.1%, partly through derivative instruments. Louis Vuitton stated in the statement that the company has passed 5%, 10% and 15% of the ownership threshold. According to the French M&A regulations, the above shareholding level should be publicly disclosed.

Louis Vuitton said on the 5th that the company welcomed the investigation and said that the investigation could clarify any unethical behavior for the company. Louis Vuitton insisted that the company did not violate any stock market regulations in this transaction.

Louis Vuitton said that the company's starting point is friendly, and no plans to take over the Hermès Group, Hermès family heirs hold 73% of the company's equity. Hermes executives said that Louis Vuitton does not think this move is friendly.

Jouyet said that "there is no problem with the investigation, but there are problems with the M & A rules, and I do not agree with some of the technical procedures." He cited equity swaps. There are loopholes in these rules, and companies can find ways to avoid the threshold of ownership.