LVMH expands portfolio with acquisition of Rimowa

London - Luxury conglomerate LVMH has acquired an 80 per cent stake in German premium luggage manufacturer Rimowa for 640 million euros (716 million dollars), as the French company continues to diversify its portfolio.

The agreement sees Dieter Morszeck, grandson of the founder of Rimowa, sell a majority stake to LVMH Group, while retaining a minority stake in the family company in order to fulfill his long-term vision for the company. The acquisition will also see Morszeck maintaining his leadership role at Rimowa as co-CEO. Once the transaction has been completed, Rimowa will be the first German 'Maison' of LVMH.

LVMH acquires 80 per cent stake in Rimowa

"It brings me great pleasure that Rimowa will be the first German house to join the LVMH Group," said Bernard Arnault, CEO of LVMH Group in a statement. "Germany is recognised all over the world for the vitality of its family businesses and for the quality of their products. I am glad that LVMH will now have an opportunity to be part of this thanks to Rimowa." The transaction, which is set to be completed by January 2017 and is subject to the approval of the competition authorities, will also see Alexandre Arnault, Bernard's 24 year son, named co-CEO of Rimowa, together with Morszeck. It will be the first big role the son will take on within his father's company portfolio.

"I am honored to join Romowa and to be working alongside Dieter," said Alexandre Arnault on his new position. The acquisition comes as Rimowa continues to grow. It's high-quality suitcases go for as little as 400 dollars and the German luggage company's growth has exceeded the luggage market's 5 percent expansion rate over the past 5 years, reported Bloomberg. "LVMH is looking for brands that have heritage and a unique position," said Mario Ortelli, an analyst at Sanford C. Bernstein to Bloomberg. "They know that when they acquire these brands they can accelerate their development."

Dieter Morszeck, is positive the sale paints a bright future for the luggage company. "My grandfather founded Rimowa more than a century ago and I joined the company 44 years ago," he said. "By entrusting this family venture to the LVMH Group, we are guaranteeing a promising future to all Rimowa employees. Over the past two years I have had the opportunity to establish close ties with the Arnault family, and in particular with Alexandre. Alexandre and I have discussed at length the attractive development prospects available to us and the common values that we share. I am delighted that he is joining Rimowa and I have full confidence in his ability to accelerate the development of the business by my side."

As part of the sale, the Rimowa Dieter Morszeck Foundation, which Morszeck established, is set to receive a substantial part of the sales proceeds. The Rimowa Dieter Morszeck Foundations aims to supports projects in scientific research, public health, education and humanitarian aid in both Germany and internationally. Since its founding in Cologne in 1898, Rimowa has gone on to become one of the "quintessential" houses for high quality luggage. In 1937, the son of the founder Paul Morszeck, Richard, created the first aluminium suitcase and later in 1976, his son Dieter, developed the first waterproof metal suitcase.

Photo: Rimowa