3.7bn euros have sealed LVMH’s take over Bulgari

3.7bn euros has been the price agreed between the two luxury giants to share their forces. The Bulgari Family, majority shareholder of the jewellery house, has decided to join forces with the LVMH Group, which will be buying 50.4% of Bulgari,

issuing 16.5 million shares in exchange for 152.5 million shares held by the Bulgari family.

The French firm will also seek to buy the rest of Bulgari shares at 12.25 euros a share - a premium of about 60%. According to LVMH Group, the agreement was concluded this weekend and was approved unanimously by the LVMH Board of Directors Sunday evening. The Board of Directors of Bulgari S.p.A. has also unanimously approved the project of contributing to LVMH the Family’s majority shareholding in Bulgari S.p.A.

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n completion of the share transfer process, LVMH will issue 16.5 million shares in exchange for the 152.5 million Bulgari shares currently held by the Bulgari Family, who will thus become the second largest family shareholder of the LVMH Group. In compliance with the Italian Stock Exchange regulations, LVMH will submit a Public Purchase Offer at the price of €12.25 per share on the shares held by minority stockholders, further details of which are described in the press releases issued today. Trading in Bulgari shares in Milan was suspended after they gained 58%.

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 Jewelry 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. Francesco Trapani, Chief Executive Officer of Bulgari S.p.A., said: “This is a significant step for our family as well as for Bulgari, occurring at a time of strong revenue growth. Our entrance into LVMH will allow Bulgari to reinforce its worldwide growth and to realise noteworthy synergies, in particular in the areas of purchasing and distribution. I would like to add that I am greatly honoured that the management of LVMH's Watches and Jewelry activities, which include prestigious brands such as TAG Heuer, Chaumet, Zenith, Hublot, Fred and De Beers, has been entrusted to me. Bulgari and these brands will be able to invest and innovate even further to become the world leader in the high end segment.”

Bernard Arnault said: “The alliance between my Group and the Bulgari Family is a perfect combination from all points of view as we share the same culture in terms of respect for identity and roots of the brands, quest for excellence, creativity and innovation. 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.”

Image: Bulgari