M&A strategies in the luxury industry : does M&A create value and increase performance for luxury conglomerates ? The case of LVMH / Catarina Maria BABAYANS

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M&A strategies in the luxury industry : does M&A create value and increase performance for luxury conglomerates ? The case of LVMH / Catarina Maria BABAYANS

Study and report

BABAYANS, Catarina Maria. Author

Published by ESCP Business School - 2012

Library: Madrid London Paris Champerret Paris Montparnasse Turin

Source : Syracuse

Item type

Study and report

Dissertation

MIM Master in Management Grande Ecole

Language

English

Publication year: 2012

Note

Annexes, illustrations.

Companies: LVMH

This paper examines the value implications of mergers and acquisitions (M&A) made by conglomerates in the luxury sector, based on the case study of LVMH. It studies the acquisition of Bulgari by LVMH to determine if there was value creation. Literature review demonstrates that transactions executed by conglomerates that engage in frequent acquisitions do not significantly create value. In the case study, positive announcement effects occur only over a short period of time, and become negative when the period of analysis is extended. Findings are ambiguous, but suggest that luxury conglomerates acquisition strategy can drive value creation, but should be considered carefully and combined with organic growth in order to succeed.

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