Proceedings of the 2nd International Conference on Financial Technology and Business Analysis

DOI: 10.54254/2754-1169/53/20230781

Analysis of LVMH Group's Business Operation Model and

Marketing Strategy
- A Case Study Based on Group Mergers and Acquisitions

Lingya Zhao1,a,*
1
School of International Trade and Economics, University of International Business and
Economics, Beijing, China
a. [email protected]
*corresponding author

Abstract: This article aims to introduce the situation of LVMH Group and its industry-leading
position in the global luxury goods market supply chain. Since its establishment, LVMH
Group has expanded its business map through continuous acquisitions and expansion,
leveraging its strong capabilities and strategic vision. The focus is on analyzing two
acquisition cases carried out by LVMH: the Tiffany & Co. acquisition case and the Dior
acquisition case. For these two cases, the background, motives, process, and key steps are
introduced, and the effects and impacts of the acquisitions are discussed in depth. At the same
time, a detailed analysis of LVMH's acquisition strategy is conducted, including acquisition
targets, selection criteria, post-acquisition integration and management, etc. Finally, the
research findings are summarized, and future development directions are proposed. Since the
gradual control of the pandemic, the luxury goods market has witnessed a recovery in
consumption and significant growth in sales. This article has certain reference values for
understanding trends in the luxury goods industry, corporate strategies, and market
competition.

Keywords: luxury management, LVMH, acquisition, Tiffany & Co., Dior

1. Introduction
The luxury goods market is rapidly growing worldwide and has become an important economic sector.
Since the gradual recovery from the pandemic, the luxury goods market has shown a trend of
consumption recovery and the significant increase in sales. Particularly noteworthy is the rising trend
in the Chinese market, with luxury giants such as LVMH and Kering Group reporting double-digit
revenue growth in the Asia-Pacific region in their 2023 Q1 financial reports, driven by the recovery
effect brought about by the reopening of the Chinese market. According to Forbes' 2023 Global
Billionaires List, Bernard Arnault, the head of France's LVMH group, became this year's newly
crowned global richest person with a personal wealth of approximately $211 billion. Previously, the
world's richest individuals mainly came from traditional fields such as financial services, technology,
and real estate, without involvement in the luxury goods industry. Therefore, it is shocking news that

© 2023 The Authors. This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0
(https://creativecommons.org/licenses/by/4.0/).

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LVMH's leader surpassed traditional fields to become the world's richest person in 2023, breaking
traditional rankings, which is not an easy feat. LVMH is indeed a very powerful entity.
LVMH has had a DNA of mergers and acquisitions since its establishment. LVMH is composed
of three major companies: Moët & Chandon, Hennessy, and Louis Vuitton. Mergers and acquisitions
are an important component of corporate strategy, involving issues related to corporate governance,
market competition, and organizational culture. The academic community has conducted extensive
research on corporate mergers and acquisitions and has achieved rich theoretical and empirical
research results.
As one of the most well-known and influential luxury goods conglomerates globally, LVMH's
mergers and acquisitions cases are representative and significant. This article utilizes case analysis
and comparative analysis to thoroughly examine the merger cases of Tiffany & Co. and Dior. It
reveals the strategic thinking and execution process behind these mergers, contributing to a deeper
understanding of merger activities in the luxury goods industry and providing valuable insights for
other luxury brands.
2. Overview of LVMH
2.1. Group History and Brand Story
LVMH, which stands for Louis Vuitton Moët Hennessy, is a French conglomerate formed by the
merger of the globally renowned leather goods company Louis Vuitton and the wine and spirits family
Moët Hennessy in 1987. The group owns 75 prestigious brands, including 31 historic brands and six
newly established ones. Its major brands include Louis Vuitton, Dior, Givenchy, Hennessy, Moët &
Chandon, Sephora, Bulgari, and Tiffany & Co., making it the largest luxury goods conglomerate in
terms of global scale.
2.2. Business Scope and Main Business Lines
The group's main businesses cover five sectors: wines and spirits, fashion and leather goods, perfumes
and cosmetics, watches and jewelry, and selective retailing. In the wines and spirits sector, LVMH's
brands, such as Moët & Chandon, Krug, Veuve Clicquot, and Hennessy are renowned for their
exceptional quality and rich history. The fashion and leather goods sector brings together well-
established brands with valuable heritage as well as young emerging labels, including Louis Vuitton
and Celine. The perfumes and cosmetics division encompasses globally recognized century-old
brands as well as promising newcomers, such as Givenchy and Parfums Guerlain. The watches and
jewelry division includes internationally acclaimed brands like TAG Heuer, Hublot with its
innovative spirit, Zenith with its craftsmanship heritage, and Dior with its creative flair.
2.3. LVMH’s Position in the Global Luxury Goods Market
French luxury giant LVMH Group has a market value of over $500 billion, becoming the first
European company to achieve this milestone and briefly entering the list of the world's top ten
companies. In terms of sales, market value, and influence in the luxury goods market, LVMH holds
the top position globally. According to LVMH's first-quarter financial report for 2023, sales grew by
17% compared to the same period last year, reaching €21.04 billion (approximately RMB 159 billion),
far exceeding market expectations of 8.97% growth. In comparison, although Kering and Richemont
are also well-known luxury conglomerates, they still have a significant gap compared to LVMH.
According to Kering's first-quarter financial report for 2023, its sales reached only €5.077 billion,
with a year-on-year growth of 2%. Richemont's financial report for the first quarter of 2023 revealed

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a sales growth of 19%, reaching €5.322 billion. Comparing these quarterly sales figures, it is evident
that LVMH has a significant advantage and demonstrates overwhelming superiority in terms of data.
3. Merger and Acquisition Case Analysis A: Tiffany & Co. Acquisition
3.1. Case Background and Motivation
3.1.1. Merger Background
In 2017, Tiffany & Co. welcomed a new brand CEO, Alessandro Bogliolo. Under his leadership,
Tiffany & Co. gained a deeper understanding of the Asian market. Through efforts, Tiffany & Co.
achieved a growth of 7% in 2019 and increased its annual revenue to $4.4 billion. This sustained sales
growth caught the attention of LVMH. Therefore, in 2019, LVMH announced its acquisition of
Tiffany & Co. for $16.2 billion, making it not only the largest acquisition in LVMH's history but also
the largest deal in the global jewelry industry to date. At the end of December 2020, this highly
anticipated acquisition was successfully completed.
3.1.2. Motivation for the Acquisition
Expanding in the Watches and Jewelry Market: LVMH's financial reports show that in the first half
of 2019, its operating income reached over €25 billion, a 15% year-on-year growth. Net profit was
over €3.2 billion, a 9% increase compared to the previous year. The profit from recurring operations
grew by 14%, reaching over €5.2 billion. In terms of revenue structure, leather goods are the main
source of income for LVMH, accounting for approximately 41% of total revenue at €10.4 billion. On
the other hand, the revenue from watches and jewelry was only €200 million, accounting for only 8%
of total revenue, making it a relatively small portion. According to official information on their
website, LVMH has six brands in the watches and jewelry sector and sought to achieve rapid
expansion in this segment through acquiring Tiffany & Co. [1].
To Counter Competitors: LVMH holds a leading position in the luxury goods industry globally,
but in recent years, the strength of its competitors has been growing. The Richemont Group and the
Kering Group have been continuously developing and expanding. Compared to these competitors,
LVMH has a gap in revenue in the watches and jewelry sector. Brands like Van Cleef & Arpels and
Cartier under the Richemont Group are European century-old jewelry brands with significant
influence and high brand recognition, which gives them an advantage over LVMH's brands.
According to the 2018 annual report data, the value created by just Cartier and Van Cleef & Arpels
exceeded the total revenue of LVMH's watches and jewelry business. If LVMH does not take action
through acquisitions, it would be at a long-term disadvantage if competitors seize the opportunity to
successfully acquire Tiffany & Co. This would make it difficult for LVMH to catch up in the jewelry
sector and allow other competitors to gain an advantage that could negatively impact their future
business development.
Gaining the Brand Advantage of Tiffany & Co.: The nature of the luxury goods industry makes
the brand a crucial intangible asset, and acquisitions serve as an important means to quickly gain the
brand advantage. Founded in 1837 in the United States, Tiffany & Co. has gained a reputation in the
field of jewelry and watches, being hailed as the queen of the jewelry industry and a well-known
luxury brand with a century-long history. Its iconic blue gift box is widely recognized and associated
with romance and happiness. Tiffany & Co.'s jewelry perfectly expresses emotions between lovers,
capturing hearts worldwide. Additionally, the movie "Breakfast at Tiffany's" starring Hollywood
actress Audrey Hepburn has brought more attention and admiration to Tiffany & Co. Known for its
"classic designs," Tiffany & Co. has always insisted on original creations in product design rather
than following mass-market or trendy trends. Compared to products that blindly pursue trends,

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Tiffany & Co.'s products have a longer lifecycle. Furthermore, Tiffany & Co. has a wide market
presence in the United States and incorporates strong American characteristics into its designs. With
clean and bold lines, their products exude an atmosphere of grandeur and elegance. In many people's
minds, Tiffany & Co.'s jewelry holds an irreplaceable position with undeniable brand influence. This
acquisition will rapidly expand LVMH's market share and influence in the watches and jewelry sector
[2].
3.2. Acquisition Process and Key Steps
3.2.1. Acquisition Process
The acquisition of Tiffany & Co. by LVMH went through a series of twists and turns. It began with
reaching a preliminary agreement in early November 2019 and was finally formalized in November
2020, taking a total of one year to complete. In the end, LVMH successfully acquired Tiffany & Co.
and incorporated it into its watches and jewelry division. The specific steps of the acquisition process
are illustrated in Table 1.

Table 1: Acquisition timeline of key steps.

Date Stage Details

01-Nov- The two sides have reached LVMH Group to formally acquire
19 a preliminary agreement Tiffany & Co.for $16.2bn in all-cash terms
LVMH abandons acquisition Tiffany & Co. lost a lot of cash after the
plans new crown epidemic hit the luxury market.
01-Sep-20
Tiffany & Co. sues LVMH for failing
Tiffany & Co. sues LVMH
to complete a $16.2bn acquisition on time.
LVMH is using delaying tactics while
01-Oct-20 LVMH sues Tiffany & Co. the other side claims Tiffany & Co. Is
mismanaging its business
01-Nov- LVMH's Tiffany & Co. acquisition falls
Reaching a final agreement
19 to $15.8bn as new price is finalized

3.2.2. Key Steps

LVMH had been waiting for an opportune moment to complete the acquisition, especially with the
uncertainty brought about by the outbreak of the COVID-19 pandemic in 2020, which had a
significant impact on the luxury goods market. In the first quarter of 2016, LVMH experienced a
sharp decline in performance by 7.4%, and global same-store sales continued to decline throughout
2017. According to reports from the second quarter of 2019, global same-store sales decreased by 3%
compared to the previous year when converted at fixed exchange rates, which was approximately
twice as much as expected. These continuous declines in brand sales demonstrated that the group was
going through a challenging period and needed to make significant strategic changes.
To effectively improve brand performance and market share in the global luxury goods market,
LVMH needed to accelerate the update and implementation of core business strategies.
LVMH started considering acquiring the company's stocks at a lower price on the public market,
which made Tiffany & Co. feel threatened and concerned about the possibility of the acquisition.
Subsequently, LVMH proposed abandoning the acquisition plan, leading to months of public
litigation between the two parties. However, at this turning point, LVMH seized the opportunity and
engaged in negotiations with Tiffany & Co., ultimately reaching a new price agreement. After twists
and turns, Tiffany & Co. eventually accepted the new price, allowing LVMH to save approximately

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$425 million, only 3% lower than the original offer. This key step paved the way for the final
acquisition at a relatively lower price.
From this process, it can be seen that LVMH did not genuinely intend to abandon the acquisition
of Tiffany & Co. but rather sought to strengthen its market competitiveness in the hard luxury sector
and counterbalance its competitor, Swiss-based Richemont Group, through this acquisition.
3.3. Merger Effects and Impacts
3.3.1. Group Financial Performance
Financial performance is the most important factor in a merger transaction as it provides direct
indicators of the impact and rationality of the deal. According to data analysis, considering the
challenging times of the COVID-19 pandemic throughout 2020 and the first two quarters of 2021,
most percentage changes on the income statement were negative. However, following the merger
with Tiffany & Co., minority interest pre-tax profit and net profit for the first half of 2021 increased
by 12%. This indicates that the merger with Tiffany & Co. had a positive impact on company
performance and demonstrates that the transaction was wise and has potential [3].

Table 2: 2021vs 2020 organic revenue change by business group and by quarter.
Q1 Q2 9M
2021vs2020 H1 2021 Q3 2021
2021 2021 2021
Wines&Spirits 36% 55% 44% 10% 30%
Fashion&Leather goods 52% ×2.2 81% 24% 57%
Perfumes&Cosmetics 18% 67% 37% 19% 30%
Watches&Jewelry 35% ×2.2 71% 18% 49%
Selective Retailing -35% 31% 12% 15% 13%
Total LVMH 30% 84% 53% 20% 40%

Tiffany & Co. has performed exceptionally well since the acquisition and has made significant
contributions to the watch and jewelry segment. As shown in Table 2, which depicts the organic
revenue changes by business group and quarter, the revenue from watches and jewelry grew by 49%
within nine months in 2021, second only to fashion and leather goods [3].

Table 3: 2021vs 2019 organic revenue change by business group and by quarter.
Q2 H1 Q3
2021vs2019 Q1 2021 9M 2021
2021 2021 2021

Wines&Spirits 17% 7% 12% 7% 10%

Fashion&Leather goods 37% 40% 38% 38% 38%

Perfumes&Cosmetics -4% -1% -3% 0% -2%

Watches&Jewelry 1% 9% 5% 1% 4%

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Table 3: (continued).

Selective Retailing -30% -19% 25% -19% -23%

Total LVMH 8% 14% 11% 11% 11%

2020 was an unusual year, widely regarded as a year of collapse for most industries due to the
impact of the COVID-19 pandemic. However, with the emergence of more vaccines and the
relaxation of citizen social distancing regulations, organic revenue has seen significant growth. This
may be attributed to retaliatory consumption by consumers, demonstrating a market rebound.
According to Table 3, the organic revenue change between 2021 and 2019 is more significant
compared to that between 2021 and 2019. Following the approval of the LVMH-Tiffany & Co.
transaction on November 24, 2019, the watch and jewelry division saw a 4% increase in organic
revenue within nine months. Considering that Covid-19 has not completely disappeared, and
consumers remain cautious about luxury purchases, Tiffany & Co.'s ability to maintain stability or
even achieve positive growth demonstrates its strong sales capabilities.
3.3.2. Impact: Expanding into the Global Market
Tiffany & Co., a renowned American luxury brand and iconic jeweller, is particularly known for
its sterling silver jewelry and diamonds. The acquisition of Tiffany & Co. will help LVMH expand
its business in the United States and further promote the geographical expansion of both companies.

Table 4: 2021vs 2020 organic revenue change by region and by quarter.

2021vs2020 Q1 2021 Q2 2021 H1 2021 Q3 2021 9M 2021
United States 23% ×2.1 60% 28% 48%
Japan 8% ×2.1 42% 15% 31%
Asia(excl.Japan
86% 55% 70% 12% 47%
)
Europe -9% 87% 25% 23% 24%
Total LVMH 30% 84% 53% 20% 40%

The data chart in Table 4 shows that the United States had the highest percentage increase in
organic revenue during the first nine months of 2021, with a growth rate of 48%, surpassing the levels
of 2020. Asia (excluding Japan) also experienced significant growth, with a 47% increase. Overall,
LVMH's performance grew by 40%. These data clearly indicate a significant breakthrough in the US
market, which can be attributed to Tiffany & Co.'s excellent position and influence in the American
jewelry industry.

Table 5: 2021vs 2019 organic revenue change by region and by quarter.

Q1 Q2
2021vs2019 H1 2021 Q3 2021 9M 2021
2021 2021
United States 15% 31% 23% 22% 23%
Japan -3% -4% -3% -6% -4%
Asia (excl.Japan) 26% 34% 30% 26% 29%
Europe -18% -15% -16% -6% -13%
Total LVMH 8% 14% 11% 11% 11%

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To provide a more informative comparison, it is reasonable to use 2019 as a baseline after the
outbreak of the COVID-19 pandemic. From Table 5, we can see that Japan and Europe experienced
a decrease in organic revenue changes of 4% and 13%, respectively. However, the United States and
Asia (excluding Japan) still maintained strong growth, increasing by 23% and 29%, respectively,
resulting in an overall performance growth of 11% for LVMH. By reorganizing the data chart, it is
evident that Tiffany & Co. possesses significant strength in the market.
4. Merger and Acquisition Case Study B: Dior Acquisition
4.1. Case Background and Motivation
4.1.1. Merger Background
From 1987 to 2013, LVMH conducted a total of 63 mergers and held stakes in 74 companies. It can
be said that LVMH's business empire was largely formed through continuous acquisitions. In the
early 21st century, the global luxury brand industry witnessed a wave of transformation, with the
Italian luxury brand GUCCI emerging in the late 19th century. Although LVMH had intended to
acquire GUCCI, after several challenging merger disputes and complex operations, it ultimately
ended in failure and had to turn to other brands for opportunities. However, in early 2017, the luxury
business began to recover, and at this time, LVMH shifted its focus towards Dior.
4.1.2. Motivation for the Acquisition
Changes in the luxury goods market: The acquisition of Dior's fashion division took place in an
environment of luxury market downturn and retail market sluggishness. In the challenging economic
climate, LVMH had concerns about future development and performance, leading them to decide on
the acquisition of Dior's fashion division. Dior, as a globally renowned brand with a high reputation,
particularly holds significant influence in the Asian market. Through this acquisition, LVMH can
further consolidate its leading position in the global market and strengthen its penetration and
expansion into the Asian market. Additionally, it helps the group to expand its market share and
facilitate overall development. By acquiring Dior, LVMH can offset some of the impacts caused by
the downturn in the market.
In June 2016, Dior appointed Maria Grazia Chiuri, the former creative director of Valentino, as
the brand's creative director. The new collections she designed played a crucial role in the fashion
division's recovery at Dior. Under her leadership, sales for Dior's fashion division continued to rise.
According to data, in 2016, the fashion division of Dior achieved sales revenue of 1.9 billion euros.
This figure is impressive and can be compared with many luxury brands.
Dior's outstanding performance has inspired LVMH's confidence in the future development of the
brand and strengthened the motivation for its acquisition. Additionally, Dior is a brand with a rich
history and unique design style, excelling in fashion, accessories, perfumes, and more. Through
synergistic collaborations with other brands under LVMH, such as Louis Vuitton and Chanel, there
can be resource sharing and synergistic effects between the brands, ultimately enhancing overall
performance and profitability.
As early as the 1960s, LVMH had already acquired Dior's perfume and cosmetics division, and
the Arnault family had previously held over 74% of the shares in Dior. Now, LVMH has bought
Christian Dior Couture, the fashion line business of Dior, from the Arnault family, merging it with
the perfume and cosmetics business. This essentially achieves a complete acquisition of Dior by
LVMH and provides support for streamlining the market demand structure for LVMH. Additionally,
this will greatly drive growth in LVMH's Fashion & Leather Goods sector and bring new vitality to

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it. Complete ownership of the brand also allows for better integration of all resources at Dior and
provides assurance for its development and innovation based on its brand characteristics.
4.2. Merger and Acquisition Process and Key Steps
4.2.1. Merger and Acquisition Process
On April 25, 2017, Bernard Arnault, the founder and CEO of French luxury group LVMH, suddenly
announced the acquisition of the remaining nearly 26% stake in Dior for a price of 12.1 billion euros,
thereby achieving full control over the brand. At the same time, LVMH also acquired Dior's fashion
line business, Christian Dior Couture, from the Arnault family and merged it with the previously
owned Dior perfume and cosmetics business. This acquisition is considered to be one of the largest
brand ownership changes in the global luxury industry in recent years.
4.2.2. Key Steps
This acquisition involves three companies: Arnault Family Group, Christian Dior, and LVMH. Before
and after the acquisition, there have been changes and adjustments in terms of equity and rights for
these three companies. The specific changes are shown in Figure 1 and Figure 2.

Figure 1: Pre-acquisition.

Figure 2: Post-acquisition.

According to Table 6, it can be observed that there was a significant increase in sales after the
acquisition of Dior in 2018 compared to 2017. The data shown in Table 5 indicates a substantial
growth rate in the Fashion & Leather Goods division, which increased by 15 percentage points in the
first half of 2018 compared to the previous year. This growth can be attributed to the contribution

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made by Dior. In 2018, Christian Dior Couture demonstrated excellence and creativity across its
various divisions compared to 2017.

Table 6: 2018vs vs. 2017 organic revenue change by business group and by quarter.
2018vs2017 H1 2018 Q3 2018 9M 2018
Wines&Spirits 7% 7% 7%
Fashion&Leather goods 15% 14% 14%
Perfumes&Cosmetics 16% 11% 14%
Watches&Jewelry 16% 10% 14%
Selective Retailing 9% 5% 8%
Total LVMH 12% 10% 11%

4.3. Acquisition Effects and Impacts

Christian Dior's haute couture fashion has been integrated into LVMH's financial reporting since July
2017. According to the data, LVMH's sales of fashion and leather goods increased by 22% on an
organic basis in the third quarter, exceeding analysts' previous estimate of 16% growth. From the
second half of 2017 onwards, all regions and product categories have maintained vitality. Sales of
leather goods, ready-to-wear clothing, shoes, and jewelry have all recorded strong growth. Maria's
fashion show showcased excellence and creativity.
The complete merger of Dior has brought significant benefits to LVMH. Not only did it have an
impact in the year of the acquisition, but Dior also injected new vitality into LVMH and provided
continued upward momentum. According to analysts' estimates, Dior's sales reached 6.28 billion
euros in 2021, contributing 10% to LVMH's total revenue and 13% to its group profit. This result
exceeded analysts' previous forecast of "approaching 6 billion euros." With Dior integrated into the
group, it has become a cash cow, continuously providing funding and sales support for the group, as
well as offering opportunities for sustained growth in the Fashion & Leather Goods division. In
addition to Louis Vuitton, Dior also leads this division in exploring new growth areas.
5. LVMH's Acquisition Strategy Analysis
5.1. Selection Criteria for Acquisition Targets
After Bernard became the decision-maker of LVMH, he began to build a world-leading luxury goods
group. Some people describe him as someone who "puts beautiful brands into his pocket." LVMH's
logic is to spend a lot of money to acquire superstars and invest less money in nurturing future stars.
Through their acquisition strategy of targeting the most prestigious brands globally, they have
achieved revenue diversification and effectively hedged business risks and exchange rate risks.
Brands like Dior and Tiffany & Co., which have a strong influence in the luxury goods market, are
successful examples. LVMH also does not miss opportunities for brands that have the potential to
expand their business footprint.
LVMH has formal acquisition criteria that need to align with the right timing. Therefore, they
conduct research analysis and strategic planning for brands that have potential acquisition
possibilities. They are skilled at seizing opportunities during economic downturns to acquire
undervalued luxury brands at a lower cost. Additionally, they exercise patience and wait for the
perfect moment to secure the lowest possible price.

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5.2. Integration and Management after Acquisition

5.2.1. Brand Integration Strategy
In terms of post-acquisition integration, LVMH utilizes its unique "LV Integration Formula" to
improve the operations of struggling brands [3]. This formula involves delving into the brand's history,
outlining its characteristics, finding suitable designers to express the brand's DNA, streamlining sales
channels, and creating a market image. In essence, this formula aims to improve brand management
and enhance the benefits of acquisitions. It encourages designers to be proactive in their creativity,
inspires inspiration, and grants them significant autonomy during the integration process [4].
As the parent company, LVMH primarily manages and coordinates the upstream manufacturing
processes. By integrating the value chains of various brands, they have constructed a complete "raw
materials - design - production - retail" value chain. In terms of upstream manufacturing, LVMH has
implemented the consolidation of production systems for its brands, streamlining many common
processing procedures to ensure consistent product quality and save internal marketing costs.
Additionally, they provide unified management services in areas such as legal, financial, and taxation
to improve efficiency. It is estimated that the consolidation of upstream raw materials and
manufacturing processes alone can save approximately 19% of internal funds. In terms of
downstream channels, LVMH's subsidiary brands can share retail channel resources [5].
5.2.2. Post-acquisition Management
Brand Management: LVMH stands out in the industry with its unique brand management approach.
Bernard Arnault adheres to a distinctive brand management philosophy that revolves around granting
brand managers significant autonomy [6]. To achieve this, managers are authorized to hold a portion
of the shares in the companies they oversee and have access to the necessary support and resources
from the group. This approach aims to unleash the talents of managers and prevent excessive
intervention from the group that could hinder their managerial freedom. It is worth mentioning that
many renowned brands were initially established and operated by different families. By maintaining
a family-style operating model, these brands can operate successfully based on their own
characteristics while achieving successful corporate management [7].
LVMH is a corporate brand rather than a product brand. It operates brands from an investment
portfolio perspective, managing and allocating resources to different brands as different types of
investment risks. At the consumer level, it is sufficient to focus on individual product brands and
purchase related products. However, at the corporate level, each brand's operators and employees
should be aware that they belong to LVMH, the world's largest luxury goods conglomerate. LVMH
positions itself as the owner of all these major brands, and this corporate image is key to its success.
Personnel Management: LVMH, as a massive luxury goods conglomerate, employs approximately
196,000 staff members across different brand categories and departments. In the context of group
acquisitions, LVMH places great emphasis on talent cultivation and development, employing unique
strategies and insights. Developing cross-brand management capabilities is a key focus of LVMH's
human resources efforts. The group believes in nurturing "versatile talents," and thus, the training
programs cover a wide range of subjects such as finance, marketing, law, and more [8].
Employees are required to have in-depth knowledge of all brands, including their history, culture,
and value within LVMH. This is particularly important for newly acquired brands, where employees
are expected to understand their cultural values and preserve their original style to retain their existing
consumer base. Additionally, there is a strong emphasis on standardized service training. LVMH has
developed a special training program called "GREATER," which includes detailed and
comprehensive customer service standards and norms to achieve a unified and standardized level of

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service and shape the image of the group. Furthermore, the company promotes the improvement of
service quality through various means such as training, manager mentoring, mystery shopper
evaluations, and supervisory oversight.
5.3. M&A Strategy: Success Factors and Challenges
5.3.1. Success Factors
Accurate strategic positioning: LVMH emphasizes strategic planning and positioning in the M&A
process, continuously analyzing its own strengths and weaknesses and seeking target companies that
complement its existing brands and businesses to achieve strategic synergies for the entire group.
With clear strategic objectives and positioning, LVMH can seize M&A opportunities and achieve
growth. When selecting target companies for acquisition, LVMH adheres to the principles of being
at the highest end and most individualistic, placing particular emphasis on the cultural heritage of the
brands. Generally, the group conducts long-term investigations and tracking of these high-end brands,
uncovering their historical stories and legends. Additionally, LVMH has also acquired some niche
brands that have unique personalities despite being relatively new in the market [9].
5.3.2. Appropriate Timing for M&A
The timing of an acquisition is also crucial, as the prices can vary significantly at different times.
LVMH has demonstrated a keen sense of timing in its M&A activities and often acts decisively.
Particularly during periods of family business splits or declining market shares, these often-become
opportune moments for LVMH to make acquisitions. For example, during the acquisition of Tiffany
& Co., the sales plummeted due to the COVID-19 pandemic, which was completely unexpected
compared to the original plans. LVMH acted decisively and, after some setbacks, managed to save
approximately $425 million, only 3% lower than the initial offer price. Throughout its long history
of acquisitions, LVMH has been known for its decisive actions and is willing to wait for years, if
necessary, to seize the right opportunity.
5.3.3. Buy but not Merge
Post-acquisition strategy is of utmost importance. Different cultures and business operation models
can pose significant challenges and workloads for the group, and any missteps can result in adverse
effects. LVMH focuses on preserving the uniqueness and value of the acquired brands after the
acquisition, making efforts to uncover their deep historical and cultural significance. Building upon
the brand's foundation, LVMH infuses new vitality into the brand and supports its development
through resource integration. In terms of brand management, there is a strong emphasis on granting
autonomy to brand managers, providing them with space for creative freedom, allowing the brand to
flourish while adhering to its original family traditions, and maximizing its brand value [7].
5.3.4. Challenges
LVMH currently owns 75 different brands, each with its unique corporate culture and brand style.
These brands come from different countries and regions, with significant differences in behavior and
habits. One important challenge is adapting to the working environment of a multinational company
when it comes to employee development. It is necessary to manage these cultural differences, ensure
cooperation and coordination after the acquisition, and avoid cultural conflicts [10].
In the luxury goods industry, brand value is crucial. When conducting mergers and acquisitions,
LVMH needs to consider how to integrate the acquired company's brand with its own brand portfolio
to achieve maximum synergies. Precisely positioning the future development of the brands is vital,

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 Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
DOI: 10.54254/2754-1169/53/20230781

as any deviation in positioning can have a devastating impact on both the group and the brand. In the
integration process, it is necessary to conduct in-depth research, comprehensive analysis, and
understanding of each brand. This involves aspects such as repositioning, product line integration,
marketing strategies, and more.
6. Conclusion
This study primarily focuses on LVMH's merger and acquisition strategies and success factors. By
analyzing the cases of the acquisitions of Tiffany & Co. and Dior, it explores their background, the
process of the mergers, and key steps, revealing the strategies and characteristics of these acquisitions.
Additionally, through analyzing relevant data, it provides a detailed analysis of the changes in sales
figures after the acquisitions and evaluates their impact on LVMH. Through the summary of cases
and data, unique merger and acquisition strategies and integration models employed by LVMH are
identified, as well as an exploration of its success factors and challenges faced.
While this study has examined LVMH's merger and acquisition strategies using a case study
approach, there are limitations in the research process. Firstly, the data and sample size are relatively
small, as only two merger and acquisition cases were analyzed. This limitation prevents a
comprehensive analysis of LVMH's overall strategies in mergers and acquisitions. Secondly, due to
the constraints of data and samples, the research results may be influenced by biases.
This study has provided a specific analysis of the background, process, and outcomes of two
merger and acquisition cases by LVMH. Future research can address the limitations of this study by
analyzing mergers and acquisitions in different business sectors within LVMH, tracking the timelines
and strategies of these acquisitions, and supporting them with financial data and relevant case studies.
Additionally, comparisons with other luxury goods conglomerate' divisions can be made to explore
the advantages and disadvantages present in mergers and acquisitions. This comparative approach
can increase the sample size, better avoid biases in research results, and bring more value to the study
of mergers and acquisitions.
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