LVMH buys controlling stake in Bulgari

by eyetee | March 21, 2011 12:00 am

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A $5.1-billion share-swapping deal between Bulgari and Moet Hennessy Louis Vuitton (LVMH) will see the French luxury conglomerate take control of the Italian jewellery house.

In an agreement unanimously approved by the boards of both companies, LVMH will issue 16.5 million shares of its stock in exchange for the Bulgari family’s 152.5 million shares in the 127-year-old company.

LVMH is set to submit a public purchase offer of $17.13 a share on stock held by Bulgari minority shareholders.

Paolo and Nicola Bulgari will remain chair and vice-chair of Bulgari’s board of directors, respectively. The deal entitles the Bulgari family to appoint two representatives to LVMH’s board of directors. Bulgari chief executive officer (CEO) Francesco Trapani will join LVMH’s executive committee and will take over management of its watches and jewellery activities later this year.

“We found in Bernard Arnault and the group he has built all the elements that are required to guarantee the long-term future of Bulgari,” said Paolo and Nicola Bulgari in a press release.

LVMH founder and CEO Bernard Arnault called the merger “a perfect combination.”

“We share the same culture in terms of respect for identity and roots of the brands, quest for excellence, creativity, and innovation,” he said. “As is the case with LVMH, the Bulgari family shareholders are directly involved in managing the company, they are entrepreneurs that know and excel in all aspects of the business, from the creation of the product to after-sales service. It is for these reasons that we immediately understood each other and agreed on the way we would work together. I am certain our partnership will be greatly beneficial to Bulgari, as well as to the LVMH group.”

Source URL: https://www.jewellerybusiness.com/news/lvmh-buys-controlling-stake-in-bulgari/