Completed on 17th April 2019
LVMH Moët Hennessy Louis Vuitton officially announced on 14th Dec. 2018 that the holding has agreed to purchase Belmond Ltd. for a $2.6Bn total consideration.
Both companies finally executed the transaction on April 17th, 2019 after Belmond’s shareholders had approved the sale in February this same year. LVMH paid a final price of $ 25 per class A share, given a company total value at $ 3.2Bn. After the acquisition was completed, Belmond’s class A shares stopped trading at the New York Stock Exchange.
Established over 40 years ago with the acquisition of Hotel Cipriani in Venice, Belmond owns and operates a global collection of exceptional hotel and luxury travel adventures in some of the world’s most inspiring and enriching destinations. The company is present in 24 countries with a unique and distinctive portfolio of 46 hotel, rail and river cruise experiences.
The transaction is expected to complete in the first half of 2019 subject to the approval of Belmond’s shareholders and clearance by the relevant competition authorities.
Bernard Arnault, Chairman and Chief Executive Offer of LVMH, added: “Belmond delivers unique experiences to discerning travelers and owns a number of exceptional assets in the most desirable destinations. Its heritage, its innovative services, its excellence in execution and its entrepreneurship resonates well with the values of the Group and is complementary to our own Cheval Blanc maisons and the Bvlgari hotels activities. This acquisition will significantly increase LVMH’s presence in the ultimate hospitality world.”
Far more than expanding, enhancing the experience portfolio
LVMH says this acquisition increases the luxury holding presence in the high end luxury hotel world. I would say that the french multinational also enhances its already existing hotel portfolio with a slight turn towards the boutique and historical residential experiences.
Synonymous with history, heritage and timeless experiences, Belmond has a seasoned management team and is an ideal complement to the Cheval Blanc maisons, renowned for their exceptional service, architecture and unique gastronomy.
The Belmond Hotel Cipriani (Venice). © Belmond
Belmond’s iconic properties include hotels like Hotel Cipriani in Venice, Hotel Splendido in Portofino, Copacabana Palace in Rio de Janeiro, Le Manoir aux Quat’Saisons in Oxfordshire, Grand Hotel Europe in St. Petersburg, Maroma Resort & Spa in Mexico, Hotel das Cataratas in the Iguassu National Park in Brazil, and Cap Juluca in Anguilla.
LVMH also enters into new experiential tourism segments with this purchase though Belmond’s rail and river cruises, including Legendary trains, such as the Venice Simplon-Orient-Express and Belmond Royal Scotsman and exceptional cruises such as Belmond Afloat in France fleet and Belmond Road to Mandalay.
Belmond Road to Mandalay river cruise. © Belmond
Far from leaving the group’s core business, I find Belmond’s purchase is in line with LVMH Group aim to offer a world of high end experiences meeting all the needs discerning clients might have, from lodging, to travel, from dressing to drinking, eating…
The right partner for growth, says Roland Hernandez, Chairman Belmond
Roland Hernandez, Chairman of the Board of Directors of Belmond Ltd, commented: “Following a strategic review that attracted broad and deep interest from a wide range of real estate and lodging companies, sovereign wealth institutions and other financial buyers around the world, the Board has concluded that this transaction with LVMH provides compelling and certain value for our shareholders as well as an exciting path forward with a group that appreciates Belmond’s irreplaceable assets and strong management team.”
The Venice Simplon-Orient-Express. © Belmond
Roeland Vos, Belmond’s President and Chief Executive Officer, said: “Today’s announcement is the result of the strong execution of our strategic vision that builds on our pioneering legacy and is an exciting development for all stakeholders, including our employees. We are confident that, as part of LVMH’s world-class family of brands, Belmond’s ability to deliver timeless, one-of-a-kind luxury experiences will reach new levels.”
Further than strategically right, n actual good business
LVMH is to acquire Belmond for $25.00 per Class A share in cash. This represents an equity value of $2.6Bn in a transaction with an enterprise value of $3.2Bn.
In the twelve months ended September 30, 2018, Belmond recorded total revenues of $572 million and adjusted EBITDA of $140 million.
Image over the headline.- The Venice Simplon-Orient-Express. © Belmond