LVMH has been confirmed as the official Global Partner of Formula 1 starting in 2025, in a significant 10-year agreement unveiled this week. The luxury conglomerate is home to several prominent brands, including Louis Vuitton, Moët Hennessy, and TAG Heuer, which were highlighted in the company’s press announcement. Although the news has circulated for several months, it is still a major development in the luxury sector, primarily due to its size. While LVMH and Formula 1 have not disclosed the exact figures, industry experts estimate the agreement is valued at between USD 100 and USD 150 million annually—a substantial sum, particularly for a top player like BlackRock.
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To provide some perspective, the LVMH group posted revenue of €86.15 billion for the fiscal year 2023, resulting in a net income of €15.17 billion. If this partnership had been active during that period, net income could have been impacted by approximately €150 million. From this initial analysis, any visible costs may cause shareholders to wince and reach for their Moët—preferably the limited edition Dom Pérignon 2003 vintage, if available. What is LVMH’s motivation for this deal? Details remain sparse, much like information regarding the activities of the Arnault family office, but here’s what the executives shared during the announcement:
“The people, the quest for excellence, and the passion for innovation are fundamental to our Maisons and Formula 1,” stated Bernard Arnault, Chairman and CEO of LVMH Group. “In motorsport, as in fashion, watchmaking, and wines and spirits, every detail matters on the road to success. Whether in our workshops or on racetracks around the globe, this relentless pursuit to push boundaries fuels our vision and encapsulates what we aim to achieve through this remarkable collaboration between Formula 1 and our Group.”
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“In recent years, Formula 1 has truly emerged as one of the most sought-after sports globally,” remarked Frédéric Arnault, CEO of LVMH Watches. “It embodies vibrant values such as innovation, teamwork, and performance, which resonate strongly with us. Many of our Maisons have long invested in Formula 1, creating unique experiences and celebration moments. With our brands and the expertise within our Group, we aim to enhance this experiential aspect that Formula 1 offers around the world. We are just at the beginning of this partnership, but the upcoming seasons promise to be extraordinary.”
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Frédéric Arnault’s prominent role in this announcement highlights his active involvement. He has previously emphasized the significance of Formula 1 for TAG Heuer, particularly when he served as the brand’s CEO, and expressed aspirations to secure a leading position in the sport. TAG Heuer currently has a partnership with the Red Bull Formula 1 team, which has proven beneficial for the brand. Reports indicate that sales for TAG Heuer tend to rise during the racing season, a claim supported by our retail sources in Singapore.
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However, a partnership of this magnitude likely requires integration with other LVMH brands. Morgan Stanley estimates TAG Heuer’s annual revenue at under USD 800 million for the previous fiscal year. It is crucial to remember that LVMH has extensive experience with such collaborations. For many years, Moët & Chandon served as the official champagne for podium celebrations, becoming synonymous with Formula 1. Industry insiders have noted that the champagne house withdrew from these events due to overwhelming inventory demands.
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As for what role Louis Vuitton will play in this partnership, speculation remains. While it would be entertaining to envision drivers outfitted in Louis Vuitton fire-resistant suits, that scenario seems unlikely. The story continues to evolve, and updates are expected as details emerge.
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