PARIS -- A year-long battle for control of the world's largest luxury goods conglomerate ended Thursday with the resignation of Henri Racamier as head of the Louis Vuitton luggage maker after a Paris appeals court refused to annul a stock warrant issue.
The warrants, representing 12 percent of Louis Vuitton Moet Hennessy's capital, allowed the group's president, Bernard Arnault, to take control of the conglomerate, which last year earned $508 million on sales of $3.43 billion.
In many ways the battle for control of the company, whose brands include Moet et Chandon and Dom Perignon champagnes, Christian Dior perfumes and Vuitton leather bags, came to symbolize the passing of the old generation of French businessmen and the emergence of a new, more aggressive French entrepreneur.
Racamier, 77 years old and patriarchal by nature, is a sharp contrast to the abrasive 40-year-old Arnault, whose stunning rise to the top is more frequently associated with American than European businessmen.
'We can only accept this decision, which eliminates the last obstacle that prevented Bernard Arnault from obtaining the objective he has pursued for over a year - to eliminate the current directors of the Louis Vuitton group so he can exercise total control,' Racamier said in explaining his decision to step down.
The court case decided Thursday was brought by shareholders who questioned the legality of 1.4 million shares gained by exercising warrants that were issued by Moet Hennessy in 1987 just before the merger with Vuitton that created the current group. Louis Vuitton is 98 percent owned by the parent group.
The shareholders argued that the issue was to have been placed internationally, but by early 1988 Arnault had acquired 11.4 percent of it, giving the entrepeneur the opportunity to take control of the group with 44 percent of the capital and 35 percent of the voting rights.
The other main shareholders in the group are the Moet Hennessy and Vuitton families.
An earlier decision on the case handed down by a Paris commercial court in November 1989 ruled that the warrants in question had been illegally issued, but the court refused to cancel it as stockholders had requested. It was that decision that was upheld today and led to Racamier's resignation.
Ironically, Arnault entered Moet Chandon Louis Vuitton's capital at the request of Racamier, who was unhappy with his relationship with Alain Chevalier, the former head of the group.
Arnault eventually had 30 percent of the conglomerate through the Jacques Rober holding company that he owned with the British drinks group Guiness PLC.But Racamier soon realized that Arnault wanted to take over the company, and the battle that finally ended Thursday was under way.
Arnault left France in 1981 when the Socialist government came to power and moved to Florida to develop housing projects.