LVMH, the French luxury goods conglomerate, is to take a controlling stake in Bulgari, the Italian jewelry house, in an all-share deal.
The agreement, which is due to be announced on Monday, will see the Bulgari family tender its 51 percent share in a share swap that will make them the second largest family shareholder in LVMH, the world’s largest luxury goods group.
Bulgari was valued at about 2.3 billion euros at Friday’s close, and the LVMH offer would put a significant premium on that figure, a person close to the deal said.
A tender offer for the remaining listed shares will also be launched on Monday.
A person close to the deal said that the Bulgari family, which includes brothers Paolo and Nicola, were united in their decision to agree to a share swap with Bernard Arnault, chairman and chief executive of LVMH.
Mr Arnault has made no secret over the past decade of his interest in adding Bulgari, one of the most illustrious jewelers and watchmakers, to a luxury goods conglomerate that includes fashion brands Louis Vuitton and Céline and champagnes Dom Pérignon and Veuve Clicquot.
The agreement would also see Francesco Trapani, Bulgari’s chief executive, taking a senior role in the LVMH group, while the Bulgari family would get board representation, the person said.
Analysts have been expecting a pick-up in deal activity in the luxury goods sector as companies seek to grow in order to tap surging demand from emerging markets.
Bulgari has long been considered one of the last great family-controlled luxury brands available to be taken over.
The deal contrasts with the situation unraveling at Hermès, where LVMH has built a shareholding of about 20 percent in the group.
The family members at Hermès, known for its leather handbags and silk scarves, have sought to fend off Mr Arnault, saying they do not view LVMH as a “desirable shareholder”.