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LVMH and the organizers of the Formula One races have signed a major sponsorship deal potentially worth $1 billion, with the French luxury goods group taking over from Rolex.<\/p>\n
LVMH Mo\u00ebt Hennessy Louis Vuitton SE will start sponsoring races from 2025, with brands including Louis Vuitton, Mo\u00ebt Hennessy and TAG Heuer all involved, according to a statement Wednesday. The deal confirms a report\u00a0last month<\/a>\u00a0by Bloomberg News of an imminent deal between both parties.<\/p>\n The 10-year tie-up could be worth more than $1 billion with annual sponsorship fees topping $100 million, people familiar with the negotiations previously told Bloomberg News.<\/p>\n The deal is both a blow to Rolex SA, the top Swiss watch brand that has been the timekeeping sponsor of F1 since 2013, and marks LVMH\u2019s bid to capture the boom in sports investment and viewership.<\/p>\n LVMH was a major sponsor for the Olympic and Paralympic Games held in Paris over the summer, providing financial support worth \u20ac150 million ($166 million). Its brands featured prominently throughout the competition.<\/p>\n LVMH\u2019s Louis Vuitton and jewelry brand Tiffany<\/a> & Co. regularly feature in global sporting events notably with the trunk cases at the Fifa World Cup or trophies for the NFL. Louis Vuitton has in particular run famous ad campaigns with footballers Cristiano Ronaldo and Lionel Messi as well as tennis players Rafael Nadal and Roger Federer shot by the photographer Annie Leibovitz.<\/p>\n The targeting of F1 by LVMH follows a resurgence in interest in the motorsport in recent years, driven by an expansion in race venues and the Netflix<\/a> series \u2018Formula 1: Drive to Survive.\u2019<\/p>\n Top Swiss brand Rolex has served as the official timekeeping sponsor of Formula 1 since 2013, with its signature green and gold adverts becoming commonplace at F1 tracks. The loss of the sponsorship deal is a setback for the world\u2019s most successful watch brand that has become closely associated with the top tier of motor racing and also sponsors tennis and equestrian events.<\/p>\n A Rolex official in Geneva declined to comment on the announcement.\u00a0<\/p>\n LVMH\u2019s Tag Heuer brand has a long history with Formula 1 and motor sports, dating back to when it was privately owned under the Heuer brand name. In the 1980s Tag Heuer introduced a quartz-powered, bright-colored plastic-cased timepiece called the \u2018Formula One\u2019 that sold millions of units. The brand introduced a limited edition reissue version of the Formula One watch in a collaboration with sportswear brand Kith this year.<\/p>\n Sales of LVMH\u2019s watch unit, which includes the Tag Heuer, Hublot and Zenith brands, led by Frederic Arnault, one of LVMH founder Bernard Arnault\u2019s five children, trail Rolex, as well as brands owned by Richemont<\/a> and Swatch Group<\/a> AG in total market share.<\/p>\n \u201cIn recent years, Formula 1 has truly become one of the most desirable sports in the world,\u201d said Frederic Arnault in a statement, \u201cWe are only at the very beginning of this partnership.\u201d<\/p>\n The deal also comes amid a demand slowdown for high-end goods. Shares of LVMH have fallen by about 8.9% so far this year as concerns about the appetite of Chinese consumers remain.<\/p>\n