The French luxury goods colossus LVMH Moet Hennessy Louis Vuitton has announced that it will acquire control of Italian company Bulgari, founded by Sotirio Bulgari in 1884, and famous worldwide for its jewellery, watches, fragrances, cosmetics and accessories. The total outlay will be about 3.7 billion euros. LVMH will purchase the Bulgari family's 50.4% share of the company for 1.87 billion euro in stock (LVMH will issue 16.5 million shares in exchange for the 152.5 million shares currently held by the Bulgari family), while other Bulgari investors will be offered 12.25 euro for each share in the mandatory public purchase offer.
Bulgari CEO Francesco Trapani said, on Monday 7 March 2011, that "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."
Paolo and Nicola Bulgari will remain Chairman and Vice Chairman of the Bulgari S.p.A. Board of Directors. Francesco Trapani will join the Executive Committee of LVMH and will take over management of the LVMH Watches and Jewellery activities from the second half of 2011.
Bulgari will become the second-largest family shareholder in LVMH, with two seats on the board. LVMH is controlled by Bernard Arnault, who developed his company by means of acquisitions such as Hennessy Cognac, Moet & Chandon champagne, and Louis Vuitton handbags.
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