LVMH-Hermès Dispute Deepens Over Secret 2002 Share Deal

LVMH’s long-running dispute involving Hermès heir Nicolas Puech has taken another turn after legal records revealed a previously undisclosed agreement to purchase shares belonging to Puech and other Hermès family members.

In a June court filing, luxury giant LVMH denied ever seeking to acquire Puech’s roughly 6% stake in Hermès against his wishes. However, documents reviewed by Reuters show LVMH signed a 2002 agreement involving Puech’s financial adviser, Eric Freymond, to buy millions of Hermès shares. Records also show LVMH and Chairman Bernard Arnault’s family holding company paid Freymond’s management firm at least $20 million in commissions and fees between 2001 and 2009.

The disclosures add another layer to the decades-long LVMH-Hermès rivalry. LVMH secretly accumulated Hermès shares before revealing a 17% holding in 2010, surprising investors and triggering a bitter corporate battle. Its stake eventually reached about 23% before a 2014 agreement led LVMH to unwind the position.

Puech claims he discovered in 2022 that his Hermès shares were missing after ending his relationship with Freymond. He later filed a lawsuit seeking €14 billion ($16 billion) in damages from parties that could be found responsible. His 6% Hermès stake would currently be worth approximately $10 billion. LVMH and Arnault are among the defendants.

LVMH has acknowledged working with Freymond to acquire Hermès stock but maintains that any purchase of Puech’s shares would have been unintentional. In a 2017 Swiss court filing, the company said the 2002 agreement was never executed because it could not confirm Freymond had authorization to sell Puech’s holdings.

French prosecutors are separately investigating the disappearance of Puech’s shares. No criminal charges have been filed against Swiss lawyer Alexandre Montavon, who advised LVMH on the 2002 agreement and denies wrongdoing. The ultimate fate of Puech’s multibillion-dollar Hermès stake remains unclear as the legal proceedings continue.