ESCP Europe

Item type

Study and report

Dissertation

• MIM Master in Management Grande Ecole

Language

English

Publication year

2012

Note

• Annexes, illustrations.

Subjects

MERGER AND ACQUISITION - PROCESS OF CREATING VALUE - LUXURY GOOD - CONGLOMERATE - GROWTH

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.