A Study on Merger and Acquisition (M&A) Strategy of Luxury Groups: Using LVMH as an Example

Abstract

This research examines the merger and acquisition strategy of luxury corporations, focusing on LVMH. The first section focuses on a large-scale literature review. It discusses the history of the luxury industry and the concepts that underpin merger and acquisition strategy. The description of the luxury sector as the epitome of the non-proletarian class and its transformation into a more accessible "mass luxury" market concluded that this change was driven by a variety of transforming influences, including price reductions and sales of luxury brands as a result of the globalisation process, as well as cultural and social influences. Simultaneously, the basic acquisition process is founded on the idea that luxury conglomerates typically purchase luxury brands to gain a competitive edge, expand their market position, and enhance their brand portfolios. As a result of the observed congruence between the features of the luxury industry and the aims of its acquisitions, LVMH made several successful acquisitions, including its largest-ever purchase - Tiffany & Co. As a result, the collected data identify the most important aspects that contribute to successful acquisition in the luxury industry. The findings contribute to the identification of a wide range of difficulties, enabling the optimization of luxury groups' acquisition strategies and ensuring their long-term development growth by combining these approaches while maintaining the independence and exclusivity of acquired brands.