French luxury goods conglomerate, LVMH Moët Hennessy Louis Vuitton S.A. has announced that the company has acquired 100 percent shares of leading Swiss watch dial-maker, ArteCad.
Established in the year 1885, ArteCad SA manufactures more than 350,000 watch dials a year and supplies LVMH brands as well as numerous other prestigious Swiss timepiece manufacturers.
The acquisition is regarded as a key step by LVMH to reduce its dependency on external providers of watch parts and movement, similar to the Swatch Group.
According to Reuters, the leading watch brand, Swatch Group has again threatened to cut supplies of watch movement to competitors. Swatch has been complaining in recent years that many of its luxury rivals have invested too much in big advertising campaigns featuring sports and movie stars and too little in production.
This transaction will enable LVMH to further reinforce its industrial integration in watch-making and guarantee its independence in the strategic area of watch dials. LVMH already produces mechanical movements as well as cases, dials and bracelets, the maker of luxury goods said in a statement following the acquisition.