Arnault To Pay $6 Billion For Fine Jeweler Bulgari.(Bernard Arnault)

Byline: LUISA ZARGANI With contributions by Joelle Diderich and Samantha Conti

Arnault to Pay $6 Billion For Fine Jeweler Bulgari

The luxury megadeal is back, thanks to Bernard Arnault.

In a transaction with a total value of more than $6 billion, Arnault's LVMH MoA't Hennessy Louis Vuitton on Monday agreed to acquire 50.4 percent of Rome-based jeweler Bulgari in a cash-and-share swap, and launched a bid for the remaining shares. In typical Arnault fashion, the acquisition will immediately reshape the landscape of the fine jewelry and watch sector, stepping up pressure on LVMH's competitors Swatch Group and Compagnie FinanciA[umlaut]re Richemont SA and potentially stirring other deals in the luxury sector. The shares of luxury companies worldwide climbed on Monday in the wake of the news despite sharp declines in global stock markets amid heightened worries over the soaring price of oil.

The purchase of Bulgari also represents a bit of bait-and-switch by Arnault, who only last month downplayed the likelihood of LVMH making acquisitions as he reiterated the group's strategy of investing heavily in its high potential brands.

Instead, the Bulgari deal will:

Double the size of LVMH's watch and jewelry division in one fell swoop;

Make the Bulgari family the second-largest family shareholders in LVMH after Arnault himself, with a 3.3 percent stake;

Give Bulgari the financial muscle to further expand its product categories and retail footprint.

The purchase comes in the midst of a turbulent period for Arnault following last week's beginning of termination proceedings against John Galliano at Dior, one of the jewels in Arnault's empire, and a stepped-up war of words from another family-owned company, HermA[umlaut]s, in which Arnault has quietly been amassing a 20.2 percent stake. The turmoil apparently hasn't distracted him too much, …