Mergers & acquisitions : a case of a merger between LVMH and Hermès

The strong competitive environment that nowadays characterizes the Luxury Goods market has led companies to look for new alternatives of value creation. In this sense, Mergers and Acquisitions are found to be an alternative to increase shareholders wealth, since they allow companies to create value. The reasoning behind this deal lies on the cost synergies and efficiency that can arise from the combination of LVMH and Hermès. This dissertation focus on the analysis of a possible acquisition involving the two companies mentioned above. The synergies value is found to be € 5 773 million, which results in an equity value for the merged entity of € 53 215 million. As a result, an offer price of € 13 494 million is determined, from which € 5 398 will be paid in cash and € 8 097 with shares issue, resulting in a premium over the market cap of 36.99%