LVMH is in late stage talks to become a major sponsor of Formula One, in a deal that would see the French luxury conglomerate promote its major brands on the race track.
The Paris-based company is nearing an agreement where watchmaker Tag Heuer as well as other brands, which could include Moet & Chandon Champagne and possibly its hotel chains, become sponsors of F1 with brand logos and products displayed prominently to race viewers, according to people familiar with the matter.
The potential agreement could be worth a reported $150 million annually, and would be a blow to Rolex SA, the top Swiss watch brand that has been the timekeeping sponsor of F1 since 2013.
The talks are ongoing and a final agreement has not been reached, said the people, who spoke on condition of anonymity because the discussions are private.
Representatives for Formula One and Rolex declined to comment. LVMH representatives didnât immediately reply when asked to comment.
The popularity of F1 has exploded in recent years, driven by an expansion in race venues and in part the Netflix series âFormula 1: Drive to Survive.â
The potential deal with F1 would provide a broad global platform for several LVMH brands, furthering the business and marketing ambitions of company founder and controlling shareholder Bernard Arnault who has built the worldâs biggest luxury company through a series of acquisitions.
LVMHâs Louis Vuitton and jewelry brand Tiffany & 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.
LVMH was a major sponsor for the Olympic and Paralympic Games held in Paris over the summer, providing financial support worth â¬150 million ($166 million). Its brands featured prominently throughout the competition. Superstar Celine Dion in particular wore a Christian Dior sparkling white silk gown when she sang from the Eiffel tower at the end of the Olympics opening ceremony late July.
The French conglomerateâs numerous luxury brands are giving it an advantage in negotiating a potential multi-brand agreement with F1 over Rolex which only produces watches, the people said.
If agreed, a deal with LVMH could be announced before the end of the year and the F1 season. LVMH Chief Financial Officer Jean-Jacques Guiony confirmed during a conference call with analysts and investors in July that the company was in talks with Formula One but said at the time that ânothing had been decided.â
By Angelina Rascouet and Andy Hoffman
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LVMH Holds Talks on Sponsoring Formula 1 in Blow to Rolex
The talks underscore LVMHâs ambitions for its watch unit, which includes the Tag Heuer, Hublot and Zenith brands.
