LVMH will become the majority shareholder in famed jeweler Bulgari, in a deal approved by the LVMH board of directors March 6.

LVMH will issue 16.5 million shares, in exchange for the 152.5 million Bulgari shares currently held by the Bulgari family, who will become the second largest family shareholder of the LVMH Group. The New York Times values the deal at 3.7 billion euros, or over $5 billion.

Francesco Trapani, CEO of Bulgari, will assume management of LVMH’s watch and jewelry division, which includes brands like TAG Heuer, Chaumet, Zenith, Hublot, Fred, and De Beers.

Philippe Pascal, the current head of this division, will remain on the LVMH executive committee and will be given new responsibilities within LVMH.

Paolo and Nicola Bulgari will remain chairman and vice chairman, respectively, of the Bulgari board of directors. The Bulgari family will also appoint two representatives to the LVMH board of directors.

Bulgari, established in 1884, is based in Rome and has an international distribution network of 168 stores. Last March, the Swatch Group denied speculation it was acquiring Bulgari.

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