Richemont\u2019s share price rose by 4.1% in late morning trading, while Kering\u2019s share price fell by 1.63%.<\/strong><\/p>\n\n\n\n Indeed, fashion blog, Miss tweed, reported late on Sunday<\/a> that a cash and stock merger proposal had been made directly by Kering CEO Fran\u00e7ois-Henri Pinault to Richemont chairman and majority shareholder Johann Rupert.<\/p>\n\n\n\n According to the blog, Rupert did not submit the offer to the board of directors, as he was not satisfied with the conditions.<\/strong> It should be noted that in November he had already stated that he did not want to sell.<\/p>\n\n\n\n Representatives of Kering and Richemont declined to comment on the information.<\/p>\n\n\n\n Rumours of a possible merger between Richemont and Kering are not new and have been circulating for years. They gained momentum when LVMH\u2019s acquisition of Tiffany put pressure on its rivals to expand.<\/p>\n\n\n\n \u201cKering stepped in just as LVMH completed its acquisition of US jeweller Tiffany & Co on 7 January. This transaction strengthened Bernard Arnault\u2019s group and further eclipsed Richemont and Kering. LVMH has once again demonstrated that size is critical in the luxury industry, increasing the pressure on Richemont and Kering to come to an agreement,\u201d<\/em> according to the blog.<\/p>\n\n\n\n Fran\u00e7ois-Henri Pinault simply replied that he was in \u201cregular contact\u201d<\/em> last month, pointing out that Richemont, like Kering, was a family-controlled group.SEE ALSO<\/p>\n\n\n\n According to a UBS<\/strong> note on Monday, a deal between Kering and Richemont would create a luxury group that could compete with LVMH\u2019s market dominance.<\/p>\n\n\n\n \u201cThe combination of the two soft and hard luxury mega-brands, Gucci and Cartier, could address Kering\u2019s perceived higher fashion risk and the perceived mismanagement of Richemont\u2019s smaller brands in its portfolio,\u201d<\/em> he said.<\/p>\n\n\n\n