Diageo Starts Proceedings Against LVMH Over Missing Dividend

(Bloomberg) -- Diageo Plc, the world's largest distiller, has started arbitration proceedings against long-time partner LVMH, saying the luxury-goods maker has failed to pay an annual dividend.

London-based Diageo, which since its creation in the 1990s has owned a minority stake in LVMH's drinks division, said it's owed a payout of 181 million euros ($215 million) for 2019, and that nonpayment constitutes a breach of the companies' partnership agreement.

LVMH has paid a dividend from its drinks business, which includes high-end brands such as Hennessy cognac, Moet & Chandon champagne and Belvedere vodka, to Diageo every year for almost three decades since the two companies began sharing in the profits of their common subsidiary.

LVMH has paid about 2.4 billion euros in dividends to shareholders for 2019. The biggest is Groupe Arnault, an investment vehicle for LVMH founder Bernard Arnault, one of the world's wealthiest people with a fortune of $82.8 billion.

Diageo disclosed the proceedings Tuesday in a results statement and declined to comment beyond that. LVMH representatives didn't immediately respond to a request for comment.

©2020 Bloomberg L.P.