LUXURY goods giant LVMH, which owns Louis Vuitton and Moet Hennessy, has admitted that it will not appeal a French fine after a long-running and heated dispute with rival firm Hermes.
In July, French market watchdog the AMF fined LVMH €8m (£6.76m) for failing to properly disclose its stake-building in rival Hermes before 2010.
LVMH said in a statement that while it would have been “entirely justified” in appealing the AMF fine, it had decided to bring a definitive end to the proceedings to avoid interference with “the sound management” of its stake, which stands at 23.1 per cent.
While not as high as the maximum €10m fine that could have been imposed, the AMF fine had come as a victory for Hermes – the 175-year-old maker of Birkin handbags – in a fight to punish LVMH for secretly building a stake.
The AMF’s enforcement committee had notably condemned the “unusual” way LVMH had amassed shares, buying equity swaps with a number of banks to avoid disclosure requirements and using foreign subsidiaries that were not listed as consolidated units.
LVMH stressed that throughout its proceedings, the AMF “expressly confirmed that in acquiring its equity stake in Hermes, LVMH never breached regulations regarding ownership thresholds or engaged in insider trading or market manipulation.”