LVMH, the world’s biggest luxury goods company by sales, has snapped up 14.2 per cent of Hermès International, famed for silk scarves and Birkin and Kelly bags, putting it in pole position to take control of what is widely considered the world’s most desirable luxury brand should the family owners wish to sell.

LVMH, which owns Dom Pérignon champagne, Louis Vuitton bags and Tag Heuer watches, intends to raise its stake in Hermès to 17.1 per cent through the conversion of derivatives, at a cost of €1.45bn ($2bn).

Industry experts praised the move, in which LVMH paid less than half the market price for the shares due to the use of derivatives, cementing its reputation as the world’s leading luxury goods group. The €1.45bn cost of the 17.1 per cent stake equates to €80.50 a share, whereas Hermès shares closed at €176.20 on Friday.