Moncler latest target in Kering-LVMH bidding war?

Moncler latest target in Kering-LVMH bidding war?
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French luxury group Kering (Gucci) has been rumoured to make a bid on Italian clothing and lifestyle company Moncler. The expensive down coats producer would be the latest target in a continuing war with archrivals LVMH.

 

Exploratory talks

Exploratory talks have already taken place between the two companies, American press agency Bloomberg reports. There is no absolute guarantee that these will result in a deal, but the rumours were enough to increase the Moncler share price by more than 9 %. The company has a market value of approximately 11 billion euros.

 

Incorporating Moncler would help Kering keep pace its French archrival LVMH, which recently purchased American jeweller Tiffany & Co for a record amount of 16.2 billion dollars (14.7 billion euros). The rivalry between Bernard Arnault (LVMH) and Francois Pinault (Kering) has greatly fuelled the transformation of the industry in recent decades, with both French billionaires building huge portfolios.

 

Transformation

The Kering group includes, among others, the brands Ulysse Nardin (watches), Boucheron (jewellery), Alexander McQueen and Yves Saint-Laurent (both fashion). However, the company has become increasingly dependent on Gucci, which accounted for more than three-quarters of the operating result in the first half of the year. The group must therefore diversify to cover itself against the risk of a decline in demand for the Italian fashion brand.

 

In Moncler, Kering would gain a label that has grown spectacularly over the past decade. The driving force behind this development is CEO Remo Ruffini, who transformed the inconspicuous outdoor brand into one of the most popular luxury brands in the world. Ruffini is also the largest shareholder of the luxury brand, with 22. 5% of the shares.