Tiffany Deal Is a Signature Move by the Sun Tzu of Luxury

By 2013, Mr. Arnault had swept through much of Europe, snapping up bigger brands like Bulgari in 2011 and Loro Piana in 2013, as well as stakes in a slew of up-and-comers. But there was one long-term target that LVMH had coveted secretively for more than a decade: Hermès.

The super-luxe, wildly successful Parisian leather house is run by the sixth generation of its founding family, which has been fiercely protective of maintaining control. Although the company went public in 1993, the family retained a 78 percent stake.

In 2001, LVMH quietly bought an initial stake of 4.9 percent through subsidiaries, and continued to accumulate shares by buying equity derivatives through financial intermediaries, always in holdings below 5 percent. In October 2010, LVMH announced that it had acquired 14.2 percent of its rival. By December 2011, that had risen to 22.6 percent, prompting Patrick Thomas, then the Hermès chief executive, to react with a notoriously crude statement.

“If you want to seduce a beautiful woman, you don’t start by raping her from behind,” he said at a news conference, where he called on Mr. Arnault to reduce the LVMH holding to 10 percent in order to show that he was not intending a takeover attempt. Mr. Arnault did not, and in 2013 the LVMH stake in Hermès grew to 23.1 percent.

There was eventually a hearing before France’s stock market regulator, with Hermès claiming LVMH had built up its stake using a system that masked its true identity. The tit-for-tat legal battle gripped France, with LVMH again portrayed as the barbarian at the gate. In 2014, a French court ruled that LVMH had to sell down its stake and distribute its shares to investors. (Groupe Arnault, the largest shareholder in LVMH, retained an 8 percent position.)

Finally, in 2017, Mr. Arnault appeared to walk away, swapping out the last Hermès shares as part of a wider corporate restructuring at LVMH, in part to help pay for the 25 percent of Dior that it did not already own. Dior minority investors could choose payment in cash or stock of Hermès, helping Mr. Arnault cash out without paying taxes on a sale. In the end, Groupe Arnault had $5 billion in profit.

“He’s not afraid of engaging in a fight, but it’s always with great calculation and a clear view of the long term,” said Serge Carreira, a lecturer at Sciences-Po in Paris. “He’s constantly evaluating the outcomes, and can put ego to the side in the service of the result.”

Consequently, said Mr. De Sole, “even when he loses, he wins.”