Richemont acquires 60 per cent interest in Van Cleef & Arpels

12 MAY 1999

Richemont, the Swiss tobacco and luxury goods group, announces that it has acquired a 60 per cent interest in Van Cleef & Arpels, one of the world's most prestigious and widely recognised luxury goods brands. Richemont's acquisition has been made in conjunction with Fingen SpA, the Italian clothing and property group, who will own 20 per cent of the company. Certain members of the Arpels family, heirs to Monsieur Claude Arpels, will continue to hold a 20 per cent interest.

Van Cleef & Arpels was founded in 1906 and is one of the world's leading manufacturers and retailers of high jewellery, jewellery and watches. Van Cleef & Arpels owns eight stores in France, the United States, Switzerland, Monaco and the United Kingdom with a further 34 exclusive boutiques, located mainly in Asia. The transaction (which includes the settlement of bank borrowings) values Van Cleef & Arpels at some SFrs 460 million.

Johann Rupert, Chief Executive of Richemont, said, "The acquisition of the shareholding in Van Cleef & Arpels offers significant long-term potential for growth. We are happy that members of the Arpels family wished to maintain their involvement in the company. This will help to ensure the tradition of this unique company."

Richemont, through its Vendôme Luxury Group subsidiary, owns a broad portfolio of some of the world's leading luxury goods brands. These include Cartier, Alfred Dunhill, Montblanc and Lancel as well as the prestigious Swiss watch manufacturers Piaget, Baume & Mercier and Vacheron Constantin.

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In addition to its interests in luxury goods, Richemont owns 66.7 per cent of Rothmans International, the world's fourth largest international tobacco company, a 15 per cent interest in Canal+, Europe's leading pay-television operator and a 49 per cent interest in Hanover Direct, a US catalogue and internet based retailer. In January 1999, Richemont announced plans for the merger of Rothmans International with British American Tobacco to form the world's second largest tobacco company. The merger with BAT is scheduled for completion in the second quarter of 1999. Following the merger, Richemont will have an effective interest of 23.3 per cent in the share capital of the enlarged BAT.

Lehman Brothers acted as financial advisors to Richemont in this transaction.