Gucci and LVMH Gucci' Was Term Paper

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Gucci too moved immediately, and along with PPR, purchased from Francois Pinault, the Sanofi Beaute Division, and also the Yves St. Laurent's couture and fragrance businesses. Ford agreed to stay on for another four years, and the PPR investment was formally approved by 80% of Gucci shareholders. However, Gucci now had a new problem, in which PPR could control Gucci with Gucci's management, and LMVH also had a stake, with 20.7% interest. (Moffett; Ramaswamy, 163)

How could Gucci uphold the promise that stockholders would get a premium if the ownership changed? In the meanwhile, LMVH wanted to free $1.4 billion of its investment in Gucci, and in November 2000, all the involved parties were back in Court. Gucci finally agreed to distribute a special dividend of $7 per share to all shareholders, except those held by PPR, but this act annoyed quite a few analysts and experts, because the premium must be at least 15%, and at the same time, Gucci continued to quote LMVH's large investment as a sort of 'uninvited acquisition' of 34.4% share in Gucci.

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However, De Sole attributed his success to excellent product design and quality, good distribution, and the best communication found in any company. (Moffett; Ramaswamy, 163-164)

If I were Gucci, I would have probably done a similar thing, wherein I would try to uphold the stockholder's interests at any cost, without compromising the company in any way, and at the same time, maintaining excellent communication channels and relations with other investors in the company, including PPR and even LMVH, to a certain extent. The outcome of the entire drama was good for Gucci, and its shareholders received their premium, and PPR continued its investments and partnership, and LMVH held stocks in the company, at no loss to anybody, while Gucci could go about acquiring the beauty and….....

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