Diageo battles LVMH over dividend
THE world’s largest spirits manufacturer has locked horns with the planet’s biggest luxury goods firm over a €181m unpaid dividend.
Guinness and Johnnie Walker owner Diageo said it had launched arbitration proceedings against LVMH over its refusal to go ahead with the €181m (£166m) payout. The pair have a relationship that dates back to 1994 when they each invested in the other company.
LVMH has since ditched its stake in Diageo. But the UK firm still owns 34pc of LVMH’s wine and spirits unit as part of a joint venture. The French conglomerate – which is controlled by billionaire Bernard Arnault – owns the remainder of the Moet Hennessy division, which includes brands such as Dom Perignon and Glenmorangie whisky. In accounts published last week, Diageo said a partners’ agreement that governs its investment means it is entitled to a share of the division’s annual profits in the form of a dividend.
Moet Hennessy is understood to have initially recommended paying a dividend totalling €531m for 2019, of which Diageo would have been entitled to €181m.
LVMH declined to comment on the case.