Fashion giant LVMH merges with Bulgari

PARIS - French fashion colossus LVMH Moet Hennessy Louis Vuitton is adding another jewel to its crown: Italy's Bulgari.

The unexpected tie-up generated new buzz during an already frenzied Paris Fashion Week. And it puts LVMH, run by France's richest man, in an even better position to woo nouveau riche consumers in countries like China and Russia who are clamoring for old-world status markers, like Louis Vuitton leather bags and Bulgari's diamond and emerald encrusted jewelry.

LVMH, the Paris-based holding company behind luxury Christian Dior gowns, Dom Pérignon champagne and Guerlain perfume, said yesterday it has agreed to buy Italian jeweler-to-the-stars Bulgari SpA in a cash-and-shares deal worth $6 billion.

LVMH managing director Antonio Belloni said Bulgari was the biggest acquisition in LVMH's more than 20-year history of snapping up luxury brands, from Kenzo to Givenchy and Marc Jacobs.

Both companies presented the deal as a way to quickly bulk up LVMH's luxury watch and jewelry business, to achieve critical mass and accelerate its growth into hot developing markets.

"We are adding to the mature markets a lot of new markets that are more and more promising like Russia, China, the Middle East, Brazil, India," said Bulgari chief executive Francesco Trapani, who will get a seat on LVMH's executive board in addition to heading up the group's watch and jewelry division, which also includes De Beers, Chaumet and Hublot.

- AP