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French Luxury Company dips fingers on Botswana paradise

Publishing Date : 11 March, 2019

Author : TSAONE SEGAETSHO

A gigantic French company with a penchant for multinational luxury products is in for a takeover of three safaris located in the tourism rich paradise in the northern part of Botswana, BusinessPost has established.


LVMH Moët Hennessy Louis Vuitton SE also known as LVMH is registered in Paris, France. The Euronext Paris listed company is controlled by the Arnault family. On top of the company is its chairman cum CEO Bernard Arnault, the fourth wealthiest man according to Forbes Magazine, who runs the company with his children; daughter Delphine is Bernard’s number two and Antoine is head of communications.


Bernard’s third child Alexandre runs German luggage brand Rimowa, which LVMH bought in 2016 while his fourth child Frédéric is a strategy and digital director of TAG Heuer, the largest watch brand owned by LVMH. The Arnault family owns a stake of 47 percent in LVMH through the family holding company called Groupe Arnault.


LVMH is known for luxury brands like the fashion house and luxury retail company known for leather clothing, Louis Vuitton. The other luxury brands by LVMH are the plush winery producer Moet and the elite cognac brandy of Hennessy. The company also has investments on real estate and hotel sectors. And according information seen by this publication, LVMH will soon be the owner of some accommodation property in Botswana in the form of 5 star rated safari lodges which are owned by Belmond, a company that is being purchased by the French company.


Last year the French company said it is planning on acquiring Belmond for $25.00 per Class A share in cash and this represents an equity value of $2.6 billion in a transaction with an enterprise value of $3.2 billion. The company revealed that time that the transaction would be completed in the first half of 2019 subject to the approval of Belmond’s shareholders and clearance by the relevant competition authorities.


It has emerged that Belmond has agreed to give the luxury dealer all its shares, meaning LVMH will now have sole ownership of the three safari lodges in Botswana; Belmond Kwai River Lodge, Belmond Savute Elephant Lodge and the Belmond Eagle Island Lodge. The three safari lodges were owned by Belmond. Belmond was partially owned by LVMH which indirectly owns the company (Belmond) with BlackRock Inc, Dimensional Fund Advisors LP, Capital Research Global Investors, The Vanguard Group, Southeastern Asset Management Inc and Giuseppe Statuto.


Belmond whose directors are; Roland Hernandez, Harsha V. Agadi, Mitchell Hochberg (all American), Ruth Kennedy, Ian Livingston, Demetra Pinsent, Gail Rebuck (all British) and H. Roeland Vos (Belgium) is listed on the New York Stock Exchange. Apart from owning safari lodges in Botswana, Belmond is a luxury hotel company and adventure travel operator that operates 46 properties which include 33 deluxe hotels, 3 safari lodges, one stand-alone restaurant, seven tourist trains and two river/canal cruise businesses. Belmond also operates famous trains and cruises in Europe, Peru and Asia.


LVMH is expected to add luxury, a word synonymous with the French company, to the already 5 Star rated plushy Belmond lodges located between the Okavango Delta, the rich tourist attract area of Moremi Game Reserve and the wildlife thronged Chobe National Park.
The Belmond safari lodges in Botswana are part of the group’s world operations which translated a revenue improvement of $1.1 million, from $35.6 million to $36.7 million. The marginal increase in Belmond’s world operations revenues are said to be due to impending of refurbishment at Belmond Savute Elephant Lodge which was closed from November 2017 to June 2018.


Belmond recorded total revenues of $572 million and adjusted EBITDA of $140 million in the twelve months ended 30m September 2018. Belmond’s Net losses for the full year 2018 were $28.5 million ($0.28 per common share), compared to net losses of $45.0 million ($0.44 per common share) for the full year 2017.


This publication has not been able to get Belmond and LVMH’s take on this recent acquisition which will see the French’s biggest luxury company lonely spreading its wing into Africa and specifically Botswana’s paradise which is the region’s tourist focal point. The local antitrust body, Competition Authority, is expected to rule on the Belmond-LVMH merger. LVMH is said to have given the local antitrust body notification for its intentions to acquire Belmond-a move which will see the French luxury company take full control of three safari lodges ploughed on Botswana’s tourist area.


LVMH chairman Arnault said in the company’s website last year that the acquisition of Belmond will significantly increase his company’s presence in the ultimate hospitality world. “Belmond delivers unique experiences to discerning travelers and owns a number of exceptional assets in the most desirable destinations. Its heritage, its innovative services, its excellence in execution and its entrepreneurship resonates well with the values of the Group and is complementary to our own Cheval Blanc maisons and the Bvlgari hotels activities,” said Arnault in the company’s website.


In an interview with BusinessPost Belmond head of communication, Jocelyn Betts said LVMH taking over the company does not mean its operations will change as Belmond will still own the three safari lodges. “Belmond has three luxury lodges in Botswana and we do not anticipate any foreseeable change to our portfolio in this market as a result of the transaction with LVMH. Under LVMH ownership, we look forward to taking our brand to new heights and to continuing to expand our portfolio of luxury travel experiences,” said Betts.

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