Bernard Arnault's Untold War Between Louis Vuitton and Gucci

Welcome to The Primest and today’s video is about The Untold War Between Gucci and Louis Vuitton

In today's video, we're going to introduce The Untold War Between Gucci and Louis Vuitton

The crown of the richest person in the world has long remained in the custody of various tech moguls like Elon Musk, Jeff Bezos, and Bill gates but for the first time in May 2021, the CEO of LVMH Bernard Arnault dethroned the tech moguls and became the richest person in the world. Although his reign was short-lived as he was again surpassed by Jeff Bezos – the brain behind Amazon but the credit of dethroning the tech moguls and major players after Amancio Ortega goes to him. Today, LVMH owns a total of 75 different brands ranging over a variety of different fashion and luxury sectors from Christian Dior and Celine to Louis Vuitton and Bulgari. famous fashion brand Gucci and in today's video, we are going to discuss that in detail. The Gucci-LVMH battle took the global fashion industry by surprise. More so, because in 1994, it was Arnault himself, who had turned down an offer to buy Gucci for $400 million. However, in just five years the same man had spent $ 1.4 billion in building up a 34% stake in Gucci. Gucci on the other hand by this time became stable and highly valued its autonomy as a brand. Since Gucci was not happy getting acquired, Bernard Arnault just went onto the open stock market and started buying shares of Gucci. Bernard started small as he just bought 5% of the company. The CEO of Gucci at that time, Domenico De Sole got notified about this purchase and he knew what this purchase meant so he had to do something to stop what was coming Gucci’s way. De Sole called a board meeting to discuss with the members, the consequences of this purchase. Gucci’s board agreed that this whole situation can play out in a two-fold way either Bernard Arnault would offer a deal to buy the whole company, or he would continue buying shares from the open market till he completely usurps over all of them. For obvious reasons, Bernard chose the second route and in just a couple of weeks the LVMH ended up buying 26.7% of all Gucci’s shares. Soon after that Bernard had a meeting with De Sole during which he asked De Sole for three seats on the Gucci's board. Since Gucci as a brand at that time was not up for getting acquired De Sole’s reply to Bernard was not affirmative and Bernard just continued buying shares of Gucci from the open market to the point where he bought around 34.4% of total company’s total shares. At this point, warning bells rang in Gucci’s controlling upper tier.De Sole by this time had no choice but to offer Bernard Arnault two seats on the board but Bernard rejected his offer and went on to call a special meeting with the board members for which he had all the authority because of his massive stake in the company. Being circumspect of the outcomes, De Sole offered Bernard Arnault to simply buy the entire company for $85 per share. Bernard at that time had all the chance to pick up the entire company but he decided not to take on the offer but meanwhile De Sole came up with an idea that would save Gucci from LVMH. De sole created an Employee Ownership plan. This plan entailed diluting all the shareholders of Gucci and creating stock that would eventually be awarded to employees. This plan increased the total amount of Gucci’s available stock by 42% and reduced the LVMH’s ownership of Gucci from 34.4% to 20% yielding Bernard furious but he did not think that he would lose the grasp he had on Gucci he thought he would be able to acquire Gucci after paying the stakeholders a premium amount. So, he started a whole new process of negotiations with Gucci and tried to convince them on the fact that no one will be looking to buy a newly created stock, but Bernard did not know that De Sole was in contact with Francois Pinault who is the leader of PPR currently known as the Kering group and on March 19, despite miraculously ongoing negotiations between LVMH and Gucci as to the ownership of the 42 percent equity stake created by the ESOP and LVMH’s entitlement to seats on its board, news broke that Gucci had agreed to sell the 42 percent stake – precisely what LVMH was vying for – to Paris-based luxury conglomerate PPR aka Kering Group for $3 billion. After hearing this news, LVMH decided to take this matter to the courts and offered an acquisition for $85 per share.

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Видео Bernard Arnault's Untold War Between Louis Vuitton and Gucci канала The Primest - The Money Channel