LVMH Moët Hennessy - Louis Vuitton has taken majority control of Heng Long, the crocodile leather supplier owned by the Koh family. The acquisition has been valued at around S$161 million (€92 million). "Heng Long is a valued and trusted supplierof fine quality crocodilian leather to luxury and high-end fashion products manufacturers globally, including LVMH," the French luxury group explained in a press release.
Paris-based LVMH confirmed in a statement that it will own 51% of Heng Long, while the founding Koh family will reduce its stake to 49% from its earlier 74% ownership of the Singapore-based company.
The acquisition of Heng Long, worth around S$161 million (€92 million), will see fourth-generation family members Chon Tong Koh and Choon Heong Koh remaining managing director and executive director respectively of the business at least for five years. Under the terms of the acquisition agreement, the Koh family will re-invest a substantial portion of their proceeds from the sale of the company in Heng Long, though LVMH did not say exactly how much.
Heng Long was founded in Singapore in the 50s and has been owned by the same family for four generations. The firm, which is publicly quoted, is world famous for its expert tanning, quality skins and craftsmanship. It had revenues of S$53.7 million (€31 million) in 2010. The deal would also benefit Heng Long's suppliers and customers, LVMH insisted, "through the
continuous development and promotion of industry-leading finishing
techniques and its increased financial means."
In the same vein, LVMH argued that the new partnership, "will strategically complement LVMH in the procurement of high quality crocodilian skins." LVMH has consistently argued that developing exotic reptile skins for the luxury market helps encourage sustainable development as well as aiding the conservation of wildlife species. The acquisition also dovetails with LVMH's long-term strategy of creating either limited edition or custom-made handbags and accessories using exotic reptile skins. The French group controls some 10 fashion houses including Louis Vuitton, Givenchy, Celine, Kenzo, Fendi and Donna Karan.