Arbitrator approves LVMH's acquisition of 58.75% of DFS.

NEW YORK--(BUSINESS WIRE)--Dec. 17, 1996--The arbitrator ("Wise Man") appointed by the shareholders of DFS has issued a ruling confirming the right of the majority shareholders to sell their interests in DFS to LVMH Moet-Hennessy Louis Vuitton.

Pursuant to this ruling and to the Purchase Agreement dated Oct. 1, 1996, with the two majority shareholders of DFS, LVMH will acquire 58.75% of DFS for a total consideration of US$2.47 billion (FRF 12.85 billion).

Closing of the transaction took place following the Wise Man's decision, except for an 8.85% interest in one of the DFS companies which LVMH will acquire following expiration of the applicable Hart-Scott-Rodino waiting period.

LVMH, the world's leading producer of luxury goods, will thus acquire a majority interest in DFS, the world's leading distributor of luxury goods.

DFS, with headquarters in San Francisco, generates annual sales of US$2.9 billion through a network of 180 stores primarily in the Asia-Pacific region. The group has a track record of outstanding financial performance with a return on equity averaging 85% per year over the past three years and strong free cash flow averaging US$290 million per year over the past three years.

The DFS management team, which spearheaded the group's rapid expansion, will remain in place, headed by Myron Ullman, the chief executive officer. LVMH has committed to maintain DFS as an independent business and to continue its existing policies, including with respect to relations with other suppliers.

Bernard Arnault, LVMH's president stated: "We strongly believe that DFS's growth will be buttressed by its affiliation with LVMH and the addition of our most important luxury products. LVMH has long considered the distribution of luxury goods in the Asia-Pacific region and emerging markets to be key to accelerating LVMH's overall growth in sales and profitability into the 21st century."

Arnault also noted that LVMH's offer to purchase the equity of DFS minority investors, Messrs. Robert Miller and Anthony Pilaro, remains open.

Charles F. Feeney, a co-founder of DFS, and Alan M. Parker, who together represent the majority of the interests in DFS, reacted positively to today's ruling. They said in a joint statement:

"This transaction will enable two great companies to maximize their true potential. LVMH will obtain expanded access to Asia-Pacific consumers, while DFS will now be able to sell the highly desirable Louis Vuitton leather goods. It's the best of both worlds. The two companies will be able to achieve the desired synergies without in any way compromising the ability of each to function independently."

LVMH Moet-Hennessy Louis Vuitton's prestige brands include: Dom Perignon, Moet & Chandon, Veuve Cliquot and Pommery champagnes; Hennessy and Hine cognacs; Louis Vuitton, Loewe and Celine leather goods and accessories; Christian Dior, Givenchy, Kenzo and Guerlain perfumes and cosmetics; Fred in jewelry, and Givenchy, Christian Lacroix, Loewe, Celine and Kenzo in couture and fashion.

LVMH Moet-Hennessy Louis Vuitton ordinary shares trade on the Paris Stock Exchange (accessible via the Reuter Equities 2000 Service under the symbol LVMH.PA; on Quotron under LVMH.EU and on Bloomberg under MC FP). Its ADRs trade in the United States on the NASDAQ National Market System under the symbol LVMHY. Each ADR represents one-fifth of an ordinary share.

CONTACT: The Abernathy MacGregor Group, Inc.

Tim Metz/Carina Thate, 212/371-5999