The Arnault family, which controls French luxury behemoth LVMH, has offered to buy the 26 per cent of Christian Dior SE it doesn't already own, and pick up Christian Dior Couture for around €6.5bn (£5.5bn).
The family, led by billionaire Bernard Arnault, will offer a mix of cash and Hermes International stock valuing Paris-based Dior stock at €260 a share. That represents a premium of 14.7 per cent over the closing share price yesterday.
Dior shares spiked on the news in early trading, rising 11.86 per cent to €253.75, at the time of writing.
It forms part of a wider move to simplify the group's structure, Arnault said in a statement.
The addition of Christion Dior Couture will bolster LVMH's fashion and leather goods division, while it should also simplify a complicated ownership structure, which had been requested by investors, according to the company.
Arnault already owns 74.1 per cent of Christian Dior, so the launch of the takeover bid is for the rest of the shares it doesn't own.
Christian Dior Couture includes leather, haute couture, as well as men and women's ready to wear, jewellery and shoes. It also owns real estate in prime spots such as Avenue Montaigne, along with a store in New Bond Street in London.
The Arnault family owns around 47 per cent of LVMH.
In a statement, Arnault said: "This project represents an important milestone for the group. The corresponding transactions will allow the simplification of the structures, long requested by the market, and the strengthening of LVMH's fashion and leather goods division thanks to the acquisition of Christian Dior Couture, one of the most iconic brands worldwide."