LVMH Acquires Bulgari

Earlier today, it was announced that LVMH has acquired a majority stake in Bulgari.

The deal which transfers the shareholdings in Bulgari S.p.A to LVMH was completed last night. 
I for one am very happy for Arnault as he was said to have been slowly courting and wooing the Trapani family, (Bulgari's controlling shareholder), for over ten years. Just last year, the Trepani family said that the company was not for sale.  

What Arnault did next was an interesting move. In the past, LVMH had made most of its acquisitions in cash. I was surprised at Arnault's technique of offering the Trepani family 3.5% of LVMH. The company had never done something of the sort and I think that is what really got the Trepani to finally accept to sell Bulgari to LVMH. All of this means that the Trepani family wants to remain involved in the Bulgari brand and help continue in its success.

For all u finance people, here are the numbers: LVMH will issue 16.5 million shares  for the 152.5 million Bulgari shares (currently being held by the Bulgari family). The Bulgari family will become the second largest family shareholder of the LVMH Group. LVMH will also submit a public purchase offer at the price of $17.18 per share on the shares held by minority stockholders.

Now for the behind the scene details: Paolo and Nicola Bulgari will remain Chairman and Vice Chairman, respectively, of Bulgari’s board of directors; the deal will allow the Bulgari family to appoint two new representatives to the LVMH board of directors. In addition, Francesco Trapani, CEO of Bulgari, will join the LVMH executive committee and will manage the LVMH watches and jewelry division in the second half of 2011. Philippe Pascal, the current head of the division, will remain on the LVMH executive committee in a different capacity.