LVMH Agreed To Buy RIMOWA At A Price Of 640 Million Euros.

France's LVMH, the world's largest luxury goods group, has announced that it has agreed to buy a controlling share of 80% of Germany's high-end luggage brand RIMOWA (640 million).

This is also the first acquisition made by LVMH group in Germany.

Although the overall growth rate of the luxury goods industry is slowing down, analysts expect that the growth of tourism related high-end luxury goods will remain strong.

This is calculated according to the expected sales volume in 2016.

The overall valuation of the acquisition of RIMOWA (800 million euros) is about 2 times of annual sales, which is obviously lower than the valuation multiplier given by Samsonite when it acquired Tumi at the beginning of the year.

The seller of this paction is the grandson of RIMOWA founder Paul Morszeck, the incumbent CEO Dieter Morszeck of the brand.

After the paction is completed, he will continue to hold part of the company's shareholding and continue to be the leader of the brand.

In addition, LVMH Group Chairman and CEO Bernard Arnault's youngest son Alexandre Arnault will become RIMOWA's joint CEO, which is jointly responsible for the daily operation of the company with Dieter Morszeck.

RIMOWA's latest innovation is closely linked to high technology: the electronic tag "RET".

The latest technology developed by RIMOWA is using a digitized data module instead of the traditional paper label on the suitcase.

RIMOWA conducted extensive testing on the technology in 2015, and will be officially launched in 2016. The cooperation with Lufthansa, Germany, has opened the door to RET's commercial application.

About this paction,

"In the past two years, I have established close cooperation with the Arnault family, and I have done a lot of in-depth discussions with Alexandre Arnault on the development of the company," he said.

I am very glad that he will join my company. I believe we will bring together a bright future for the company. "

Alexandre Arnault said: "I have been for years

Loyal users, they have made great contributions to the development of suitcase industry.

I am honored to be one of them. "

"Bernard Arnault is a storied company with unique history," said Bernard.

Like LVMH group, they are full of innovative spirit and hope to bring the highest quality products to consumers.

I am glad that they can become our first German company.

In addition, while preparing for the deal, Dieter Morszeck also founded a foundation called RIMOWA Dieter Morszeck Foundation.

A portion of this paction will be donated to this foundation to provide support for scientific research, public health, education and humanitarian projects in Germany and around the world.

The paction also needs approval from the relevant regulatory authorities, which is expected to be completed in January 2017.

Earlier this year, Samsonite (Samsonite), the world's largest travel and luggage group, bought Tumi, a luxury luggage brand located in New Jersey, USA at a price of 1 billion 800 million US dollars.

"Before Samonite bought Tumi, plus the acquisition, there is no luxury suitcase brand worth buying in the market."

Luca Solca, an analyst at Exane BNP Paribas, said: "the development of tourism will continue to promote the trunk industry."

After the announcement, LVMH's shares rose 1.09%, better than the 0.79% increase in the CAC-40 blue chip index.