LVMH Moet Hennessy Louis Vuitton is buying Italian cashmere company Loro Piana for 2 billion euros ($A2.85 billion) as the global luxury giant expands its portfolio of brands.

The transaction, announced late Monday, covers 80 per cent of the shares.

Loro Piana will retain the remaining stake in its business.

Paris-based LVMH operates such brands as Louis Vuitton, Givenchy, Fendi, and Donna Karan.

Loro Piana’s heritage dates back six generations in the production of high-quality textiles.

AP