Bernard Arnault, the world’s richest person with a $227.7 billion fortune, is taking proactive measures to prevent succession battles and ensure the continuity of his family’s control over LVMH Moet Hennessy Louis Vuitton SE, the largest luxury goods company in the world: LVMH’s remarkable growth, driven by global demand for its iconic brands such as Louis Vuitton, Dom Perignon, and Tiffany & Co., has propelled the company’s value to over €400 billion.
At the age of 73, Bernard Arnault is well aware of the risks and conflicts that can arise during succession transitions, which have plagued numerous family-run businesses, and inspire TV shows such as “Succession“. Having previously capitalized on weaknesses in rival companies like Hermes International, he now aims to solidify his family’s dominance and avoid internal disputes within his own empire.
Over the past year, he has quietly implemented a series of strategic moves to establish a new holding company, in which control is equally shared among his five children. This entity already possesses significant influence over major decisions affecting LVMH. Bernard Arnault’s objective is for this structure to foster unity among his heirs, safeguarding the family’s control of LVMH for decades to come.
Although the plan does not explicitly address who will assume the operational role of CEO after him, potential contenders include Delphine (47) and Antoine (45) from his first marriage, as well as Alexandre (30), Frederic (28), and Jean (24) from his current marriage. Speculation about the succession battle gained traction when Delphine was appointed to lead Christian Dior Couture, while Antoine became CEO of a key holding company within the luxury group. The three younger siblings are also climbing the corporate ladder, fueling perceptions of a race to the top.
Meanwhile, Bernard Arnault shows no intention of stepping down soon, having extended the age limit for his roles by five years to 80. Observers cite his robust health and suggest the possibility of further age rule extensions or even the potential for him to continue leading until his passing. Still, while he and his children declined interviews regarding succession plans, it is evident that he aims to circumvent the pitfalls that have afflicted other wealthy families when wealth transitions from one generation to the next.
Bernard Arnault’s strategy involves transforming his holding company, Agache SE, into a limited joint-stock partnership, Agache SCA, a structure that grants significant influence to a shareholder with a relatively small stake. This mechanism acts as a safeguard against external takeovers. Notably, the Lagardere SCA case in France exemplifies the importance of protecting control during succession transitions.
Agache Commandite, another newly formed company, features a rotating, two-year chairmanship held initially by Delphine. Its five-member board ensures a balanced distribution of power among the children. Crucial decisions, such as dissolving Agache SCA, making major strategic changes, or affecting LVMH’s future, require unanimous board approval.
While the Arnault offspring have yet to assume operational leadership roles in LVMH’s profit-generating companies, the founder has entrusted experienced executives from outside the family to oversee these brands. Sales at Louis Vuitton surpassed €20 billion last year under the leadership of Michael Burke and Pietro Beccari, proving the effectiveness of this strategy.
Bernard Arnault’s foresight also includes safeguards to protect the family’s control over LVMH. A 30-year lock on selling shares without board approval, restrictions on admitting external partners, and clear guidelines for involvement in major decisions all contribute to the family’s grip on the luxury conglomerate.
By implementing a new company structure and establishing clear decision-making processes, Bernard Arnault aims to ensure the longevity and continued success of LVMH while minimizing the risk of internal conflicts. As the world’s wealthiest person, his approach serves as a blueprint for other business families navigating succession challenges.
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