Merger speculation at the high end
30/08/2007
Merrill Lynch is reporting that rival luxury goods brands PPR and Coach may each be considering a bid for the Burberry Group.
Paris-based analysts have speculated that PPR may want to buy the London-based company to add its brand to a range that already includes Gucci and Balenciaga. Coach, on the other hand, may be interested as it competes with Burberry at the moment in the leather handbags space.
Merrill analysts have also made the point that merger activity is likely to pick up this year in the luxury goods industry, which they have valued at $218 billion, because of "generational transitions" in familyowned companies, while potential predators such as LVMH are "flush with cash".
Demand for the most expensive fashion goods continues to rise, Merrill Lynch insisted.
