LVMH takes control of Italy's Bulgari
LVMH, the world's leading luxury retailer, said Monday it will take control of Italian top-end jeweller Bulgari in a deal worth nearly two billion euros.
An accord reached with the controlling Bulgari family for the company, founded in 1884, will see LVMH issue 16.5 million shares to them for their 51 percent holding in a deal valued at 1.84 billion euros ($3.4 billion).
LVMH will also offer other Bulgari shareholders 12.25 euros a share, with this part of the deal potentially worth another 1.79 billion euros if all the outstanding shares are acquired.
In turn, Bulgari will become the second largest family shareholder in the LVMH group, taking two seats on the board.
A Bulgari statement said that the company found in LVMH and its French multi-billionaire owner Bernard Arnault everything it felt it needed to guarantee its future.
Arnault called the deal an "ideal arrangement at every level."
In early Paris trade, LVMH shares were down 1.70 euros in a slightly weaker overall market.
LVMH, which counts among its brands Givenchy, Dior and Guerlain perfumes alongside Moet and Chandon and Dom Perignon champagnes, is one of the most successful luxury retailers in the world.
It recently bought a large stake in smaller French rival Hermes but has insisted that speculation it wants to ultimately control that company is without foundation.
© 2011 AFP