LVMH picks up majority stake in Italy’s Bulgari S.p.A. in a $5.2 billion deal

French firm LVMH has acquired Italy’s Bulgari, majority owned by the Bulgari family. The move is aimed at reinforcing the long term development of the Bulgari Group, said the Italian firm.

Under the terms of the acquisition, 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.

Further to that, LVMH will submit a Public Purchase Offer at the price of €12.25 per share on the shares held by minority stockholders. 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.

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.

Commenting on the acquisition, Mr. Paolo Bulgari, Chairman of Bulgari S.p.A. and Mr. Nicola Bulgari, Vice Chairman of Bulgari S.p.A., said the French group has all the elements that are required to guarantee the long term future of Bulgari. Bulgari gains the ability to gather into one powerful organization different brands that can grow and develop while preserving both their identity and originality, said Paolo Bulgari.

According to Bulgari, LVMH has a culture completely identical to Bulgari’s, which is characterized by an unceasing quest for quality and excellence; a perfect harmony between family control of the capital, thereby ensuring a 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.

Francesco Trapani, Chief Executive Officer of Bulgari S.p.A., said the investment marks a significant step for the family as well as for Bulgari, occurring at a time of strong revenue growth. Joining hands with LVMH will allow Bulgari to reinforce its worldwide growth and to realize noteworthy synergies, in particular in the areas of purchasing and distribution, he said.

8th March 2011

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