LVMH shares up on Loro Piana cashmere brand purchase

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Shares in LVMH have risen by more than 2% after it bought 80% of Italian luxury cashmere clothing brand Loro Piana for 2bn euros ($2.57bn; £1.7bn).

The deal values the family-owned company at 2.7bn euros.

It started as a wool mill in 1924 and is the largest Western manufacturer of cashmere, LVMH said.

The deal comes two years after LVMH bought jeweller Bulgari, and a decade after it acquired leather goods maker Fendi and fashion label Emilio Pucci.

"The price is steep, but it is a fairly unique business," said Paul Swinand, analyst at market researcher Morningstar.

Loro Piana makes 30% of its sales in Asia and has enjoyed continued strong demand in China.

It expects sales to grow by about 10% this year, after growth of 13.1% to 630m euros in 2012.

LVMH said that, as well as seeking a wider global presence for Loro Piana, it also planned to expand the Italian brand's leather goods offering.

In late morning trade in Paris, shares in LVMH were up by 2.14% at 131.50 euros.