LVMH To Take Over Bulgari

Moët Hennessy Louis Vuitton S.A is usually shorted to LVHM, is a French holding company and is the parent of around 60 sub-companies that each manage a small number of prestigious brands such as Fendi, Givenchy and Marc Jacobs. These daughter companies are to a large extent run autonomously. The group was formed after a merger between Moët et Chandon and Hennessy and later in 1987 they merged with fashion house Louis Vuitton to form the current group.

 

LVMH will buy 50.4% of Bulgari, issuing 16.5 million shares in exchange for 152.5 million shares held by the Bulgari family.

Bulgari was first started in 1884 by Greek immigrant Sotirios Bulgari, who opened the flagship Via Condotti store in Rome in 1905 which has now expanded to more than 260 stores.

The French firm will also seek to buy the rest of Bulgari shares at 12.25 euros a share – a premium of about 60%.

Bulgari has agreed to the takeover “in order to reinforce, in accordance with its history, values, craftsmanship and identity, the long-term development of the Bulgari Group”, it said. As part of the deal, the Bulgari family will become the second-biggest family shareholder in LVMH.

Paolo and Nicola Bulgari will remain Chairman and Vice Chairman of the Bulgari S.p.A. Board of Directors, respectively. The Bulgari Family will furthermore be entitled to appoint two representatives to the LVMH Board of Directors and Francesco Trapani, CEO of Bulgari S.p.A., will join the Executive Committee of LVMH and will assume in the second half of 2011 the management of the LVMH enlarged Watches and Jewellery activities. Philippe Pascal, the current Head of these activities, will remain on the LVMH Executive Committee and will be given new responsibilities within the Group.

By Danielle Harper