The agreement was concluded and approved unanimously by the LVMH board of directors as well as with the Bulgari board of directors. Both boards also unanimously approved the fact that the Bulgari family’s majority shareholding in the Italian House will now go to LVMH.
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 then submit a Public Purchase Offer at €12.25 per share on the shares held by minority stockholders.
Strong future outlook
Bernard Arnault, owner of LVMH believes the alliance between the two groups bodes well for the future and development of both companies, stating that both group’s shareholders are involved in the management of the business and share the same views.
“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.
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.
Strong revenue growth
Bulgari CEO, Francesco Trapani, who will join the LVMH board of directors, stated that the move was a significant step as it is 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,” he said.
The deal will reinforce Bulgari’s watch and jewelry 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.