The $2.47bn (pounds 1.5bn) deal hangs in the balance, however, and remains dependent on the resolution of a dispute between DFS's largest shareholders.
Hong-Kong based British billionaire Robert Miller, who owns 39 per cent of DFS, is understood to have launched his own bid for the shares in DFS he didn't own and he has opposed the bid from LVMH, saying it would compromise the retailer's growth prospects.
Together with his financial advisers, Mr Miller is understood to have secured the services of "reputable financial institutions" and for tax reasons would have been able to offer a slightly better price than LVMH.
Mr Miller remains in dispute with Charles Feeney, a DFS partner, and the company's tax lawyer Alan Parker, who have agreed with LVMH to sell their combined 58 per cent holding.
Investors applauded the deal, which marks an unexpected diversification for LVMH, which owns 21 per cent of Guinness, the stout to spirits drinks group.
The move into the retail industry expands its activities from production of designer handbags, perfumes and expensive drinks to marketing and sales.
The company said DFS was the world's largest luxury products distributor with annual sales of more than Fr15bn (pounds 1.8bn), 180 shops and 20 years' experience in retailing in Asia.
"Thanks to this acquisition, LVMH will increase its presence in the Asia- Pacific region and emerging countries, a future growth area," the company said.
San Francisco-based DFS has sales of around $3bn, with LVMH products thought to account for about 10 per cent of the total.
More than half its sales last year were generated in the United States and the Far East.
"This deal has fabulous development potential for us. It's a diversification that's linked directly to our business," the company added. Shares in LVMH, one of the most widely traded stocks in Paris, rose sharply on the deal.
"It's a very good deal," one trader said. But he added that the market had few details. The company was hosting a meeting of analysts in the French town of Cognac yesterday morning.
It said in its statement that it would keep DFS's management team in place and that the chain would be managed independently of LVMH's other businesses, which include Moet & Chandon champagnes, Hennessy cognacs, Christian Dior and Guerlain perfumes and beauty products and Louis Vuitton designer luggage.
LVMH said the acquisition of 58.75 percent of DFS hinged on certain conditions but did not elaborate. "We can't say any more until the deal is finalised," the spokeswoman said.
Industry sources said that LVMH was waiting for a resolution of a dispute among DFS's owners being handled by a US mediator.
Standard & Poor's, the credit rating agency, said it was considering downgrading LVMH as a result of the proposed deal. The agency said: "The flexibility that LVMH had, reflecting its low debt that was comfortably covered by cashflow, risks being reduced."
S&P said it was meeting soon with LVMH managers to assess the operational impact and the company's financial objectives.Reuse content