The Paris-based holding company behind luxury Christian Dior gowns, Dom Perignon champagne and Guerlain perfume has agreed to buy Rome-based jeweler Bulgari SpA in a cash-and-shares deal worth euro 4.3 billion ($6 billion). The deal will see Bulgari's founding family become the second largest family shareholders in LVMH behind that of Chief Executive Bernard Arnault.
France's richest man, Arnault has grown LVMH into a euro 20 billion company since its creation in 1987, acquiring an impressive portfolio of luxury brands that extends to Chateau d'Yquem wine and TAG Heuer watches. Earnings have benefited from a surge in demand in developing countries like China.
Arnault's latest takeover adds the fabled jeweler favored by Hollywood stars like Elizabeth Taylor, whose collection included an 18-carat emerald brooch surrounded by diamonds — the only piece of jewelry she wore to her first wedding to Richard Burton. The jeweler also designed the 1967 gold, emerald, ruby and sapphire necklace worn by Keira Knightley at the Oscars in 2006.
LVMH said in a statement it will exchange 16.5 million of its own shares for the 56 percent stake in Bulgari owned by the company's founding family.
LVMH will offer the remaining Bulgari shareholders euro 12.25 ($17.10) per share in a public offering. Following the deal, the Bulgari family will own 3 percent of LVMH.