French luxury goods maker LVMH Moet Hennessy Louis Vuitton SA (EPA:MC) may pursue an acquisition of Burberry Group plc (LON:BRBY), according to traders, quoting market speculations.
A big takeover in the fashion and leather goods segment would be a good fit for LVMH, with LVMH being manufacturer, while Burberry having to outsource its leather goods, Berenberg Bank analyst John Guy said, as cited by Reuters.
According to the analyst, there will be also an opportunity for LVMH to distribute Burberry’s beauty and perfumes lines and, besides, the French company’s centralised real estate management may help trim Burberry’s operational expenses as a percentage of sales.
A deal for Burberry could also help LVMH boost revenues, Bloomberg reported separately, citing Berenberg Bank. Burberry generates annual sales of some USD3bn (EUR2.3bn).
Competition concerns arising from a potential combination would be alleviated by the parties’ different business focuses, Guy told Reuters.
LVMH did not wish to comment, when reached by Reuters, while a source in the know told the agency the idea was totally far-fetched.