• Transaction / Assets
    LVMH Acquires Belmond Hotels for €2.3 Billion
  • Seller
    Belmond
  • Buyer
    LVMH
  • € MM
    2300

The Louis Vuitton Group Acquires Reid’s Palace in Funchal, Madeira

14 December 2018

The world leader in luxury goods has agreed to buy Belmond, which owns hotels in 24 countries. One of those is Reid’s Palace, the iconic hotel in Funchal.

Reid’s Palace, an iconic hotel in Madeira, is changing hands. LVMH Moet Hennessy Louis Vuitton, the world leader in the luxury segment, just announced that it has agreed to buy Belmond, a hotel group with a presence in 24 countries. One of them is Reid’s Palace, the historic hotel in Funchal.

LVMH ended up offering $25 per Class A share, for a total investment of $2.6 billion (€2.3 billion).

“Belmond offers unique experiences for travellers and has assets in some of the best destinations. Its heritage, innovative services, and excellence in execution and entrepreneurship pair well the group’s values ​​and its complementarity with our network and the activities of both Cheval Blanc and Bvlgari hotels. The purchase will increase our presence in global hospitality,” said Bernard Arnault, chairman and CEO of LVMH.

In September of this year, Belmond posted earnings of $572 million (€504 million), the company announced in a statement. The two companies believe that the transaction will be completed during the first half of 2019, as it is only awaiting approval by the company and the competition authorities.

The Belmond Group was created 40 years ago after the acquisition of the Hotel Cipriani in Venice. After that first step, the group’s network grew to its current portfolio of 46 units in 24 countries around the world. In addition to Reid’s in Madeira and Cipriani in Italy, the Belmond hotel chain owns the Grand Hotel Europe in St. Petersburg, the Maroma Resort & Spa in Mexico and the Hotel das Cataratas in Iguaçu National Park, Brazil.

“Following a strategy that captured the attention of several real estate companies, healthcare institutions and other buyers and investors worldwide, the board concluded that the transaction with LVMH will create more value for our shareholders as allowing us to join in on an exciting journey with a group that values ​​Belmond’s irreplaceable assets and its strong management team,” Roland Hernandez, Belmond’s chairman, stated.

Original Story: Economia Online – Mariana de Araújo Barbosa

Photo: D.R.

Translation: Richard Turner