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LVMH seals Bulgari tie-up and confirms management team

By Simon Pitman , 05-Jul-2011
Last updated on 05-Jul-2011 at 12:16 GMT

LVMH says that all the concerned regulation authorities have given their consent to the joint long-term development for new lines of luxury products with Bulgari.

The agreement means that the two companies will work together on the development of new lines for cosmetic and fragrance products, as well as watches and jewellery.

Originally concluded and approved by both the companies’ respective board of governors back in March, the next stage of the deal will be implemented now that the competition authorities and the European Commission have given approval.

LVMH to buy majority stake in Bulgari

LVMH will now go ahead with a tender offer for the outstanding shares owned by Bulgari minority shareholders in the coming weeks, tipping the Bulgari family’s majority shareholding in favour of the Italian luxury group.

Upon 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 now submit a Public Purchase Offer at €12.25 per share on the shares held by minority stockholders.

Executive shake up

The company also confirmed that Bulgari’s Francesco Trapani will assume the head of LVMH’s Watches and Jewellry activies, as well as being appointed to the board of governors, while Philippe Pascal will become an advisor to LVMH CEO Bernard Arnault.

Arnault has previously said that he expects the partnership between the two group to bode well for the future and further development potential, stating underlining the fact that both businesses share the same common goals.

“It is for these reasons that we immediately understood each other and agreed on the way we would work together. I am certain that our partnership will be greatly beneficial to Bulgari as well as to the LVMH Group,” he said.

Shared long-term strategic vision

The Bulgari Group echo these sentiments and believes the collaboration fits Bulgari’s long term strategic vision, and an opening towards the stock market which is a stimulus for management while at the same time providing liquidity for the family shareholders.

The deal will reinforce Bulgari’s watch and jewellry business with the addition of brands such as Tag Heuer, Hublot, Zenith and De Beers, but will also significantly boost its cosmetics and fragrance portfolio.

The Bulgari fragrance and skin care products will be joined by Christian Dior perfumes and cosmetics as well as Guerlain perfumes, and fragrance retailer Sephora.

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