NEW YORK (AP) -- LVMH Moet Hennessy Louis Vuitton is buying an 80 percent stake in Italian cashmere company Loro Piana for 2 billion euros ($2.57 billion) as the global luxury giant expands its family of brands.
As part of the deal, which was announced late Monday and is subject to approval by competition authorities, the owners of Loro Piana will retain the remaining stake in the business.
The transaction values Loro Piana at 2.7 billion euros ($3.47 billion). That's more than three times the expected 2013 sales of 700 million euros ($900.4 million).
Paris-based LVMH operates such brands as Louis Vuitton, Givenchy, Fendi and Donna Karan.
The Loro Piana family began trading wool and fine textiles at the beginning of the 19th century and in April 1924 Pietro Loro Piana established the business in Qarona Sesia, Italy. His work is continued by Sergio and Pier Luigi Loro Piana. Under their stewardship, Loro Piana has become the world's leader in cashmere and the rarest wools and has developed a worldwide network of more than 130 exclusive boutiques', where products are sold under the Loro Piana brand. Brothers Sergio and Pier Luigi Loro Piana will remain at the helm of the firm.
Loro Piana cashmere sweaters typically sell for anywhere from $1,000 to over $2,000.
"Loro Piana is an exceptionally rare Maison, rare in the unique quality and craftsmanship in its products, not least in cashmere and fine textiles but also in the unbroken heritage and careful family husbandry over six generations," said LVMH CEO Bernard Arnault, in a statement.
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