The Gucci vs LVMH battle that ended up in court

If you watched The house of Gucci, you know what happens with the Italian brand at the very end, Domenico De Sole takes the company from the hands of the Gucci family and becomes the CEO of Gucci. But what you don’t know is what happened right after that, Gucci was at its peak, the brand was stable, it was highly profitable. Tom Ford was a creative director, and the Gucci stocks were super high. But even in the midst of this incredible success, Domenico was terrified of someone in particular, Bernard Arnault, the chairman of LVMH, who at the time already owned Louis Vuitton, Dior, Givenchy, Loewe, and Celine and obviously wanted more. Since Gucci was not happy getting acquired Bernard Arnault then went into the stock market and started buying shares of Gucci. He started really small buying only 5% of the company. But when the CEO of Gucci, Domenico got notified about this purchase, he had to do something quick to stop what was coming Gucci’s way he called a Gucci board meeting and they realized that this situation could play out in two different ways. One Arnault would offer a deal to acquire Gucci or he would continue to buy shares on the open market until there were no more Gucci shares left. Well, right after that just two weeks LVMH bought 27% of all Gucci shares after that Bernard called up a meeting with De Sole where he asked De Sole for three seats on the Gucci’s board which De Sole denied. The saga continued and Bernard proceeded to buy 34% of Gucci shares and then Gucci had no choice but to offer Bernard two seats on the board but Bernard rejected the offer and given his influence and his massive stake in the company he called a special meeting with a board members Gucci then finally gave up and offered Bernard to buy the entire company for $85 per share, but Bernard did not take the offer and then De Sole had an idea that would save Gucci from the hands of LVMH. What he did is that he basically diluted all the shareholders of Gucci and created stock that will be awarded to employees. This increased the amount of witches available stock and reduced LVMH ownership of Gucci from 34% to 20%. Needless to say Bernard was furious, but he still thought he had power over Gucci and started a whole new process of negotiations with Gucci. But what he didn’t know is that De Sole was in talks with François-Henri Pinault, the leader of the French luxury conglomerate Kering and then one day despite the negotiations with LVMH, Gucci decided to sell all its 42% equity stakes to Kering for $3 billion. After receiving the news LVMH decided to take Gucci to court and offer an acquisition for $85 per share in wanting to force Gucci to take Bernard’s offer, but Gucci rejected the offer and chose to sell its shares to the Kering group for $75 per share. And then Kering went on to buy the remaining Gucci shares from LVMH for $94 per share. What is funny is that Bernard also tried to acquire Hermes the same way but again, he was not successful that only shows that for years like we know LVMH has been trying to build almost a monopoly in the luxury market.