If Napoleon Bonaparte were to be reincarnated, he might choose to inhabit Bernard Arnault, the French billionaire known as the emperor of fashion. The two men share many traits: a quintessential Frenchness combined with invasive international ambition; small stature and a penchant for elegant clothing; a highly developed aesthetic sense - Mr Arnault is an avid patron of art exhibitions - and utter ruthlessness.

Most of all, at least for the foreseeable future, France's 19th and 20th century emperors have confrontation with les rosbifs in common. In French eyes, it was the British who fired the first shot, on May 12th, 1997, when Grand Metropolitan and Guinness announced they were merging to form GMG, the world's largest drinks and spirits company, worth £24 billion sterling.

They seem to have forgotten - or at least underestimated - the cocky little Frenchman whose company, Moet Hennessy Louis Vuitton (LVMH) was the single largest shareholder in both, with (at the time) 14.2 per cent of Guinness and 6.9 per cent of Grand Met.

Mr Arnault saw himself being pushed aside. The French press announced his first defeat in an astonishing 15-year rise from running his father's construction company to heading the world's largest luxury goods corporation.

BA - as he is known in French financial circles - was enraged; moreover, he was determined not to be betrayed by the English. His retaliation began with a simple non and has since mushroomed into the business battle of the year, with Mr Arnault trying to force the two British companies into a mariage a trois with Moet Hennessy as the bride.

Grand Met and Guinness have reportedly hired 182 law firms, while Mr Arnault, true to his secretive, private ways, relies on a handful of close advisers.

The conflict has taken on nationalistic overtones, with the French press taking umbrage at British depictions of Mr Arnault as wily, cheeky, arrogant, moody, tenacious and a megalomaniac. In the past, he was called all of these - and worse - in France, where he specialised in hostile takeovers of poorly-managed family companies.

Indeed, he is viewed as "the most anglo-saxon" of French businessmen, a dubious compliment implying less than gentlemanly behaviour. But success - LVMH has outperformed the stock market index by 45 per cent over the past five years - has dulled the criticism.

The stuffy aristocrats who were once horrified to see the upstart bourgeois from northern France stalking their companies were mollifed when their shares sky-rocketed in value.

Mr Arnault is still regarded as tough, cold and a sphinx who never says what he is thinking. He has a reputation for firing employees who irritate him - a shocking habit in France. But other words creep into the French vocabulary these days; words like daring, genius, even a captain of industry. "LVMH has become a symbol, like the French flag," says Mr Philippe O'Rorke, a marketing consultant for the Paris firm Socioconsult. "It's trammelled up with French pride. France is suffering economically, and LVMH is one of the few French companies that works well."

Franco-British rivalry does not affect Mr Arnault's fashion judgment; on the contrary, in the past year he shocked people by putting two young Britons, John Galliano and Alistair McQueen, at the head of the Dior and Givenchy fashion houses. (Yves Saint Laurent denounced their spring shows as "a circus".)

The decisions say a lot about his executive style. He has a hands-on approach - how many chairmen of world class companies personally pick designers and name perfumes? And he is hungry for young talent. "He is a bull in a china shop - but it was old china,"

Mr O'Rorke says. "He loves to make things move, to make changes."

Mr Arnault has realised the importance of mastering the whole chain of production, marketing and distribution to create cost-saving synergies in the fashion industry. For example, he uses a Kenzo factory to make Lacroix ready-to-wear, and Kenzo perfume is now manufactured by Givenchy.

His October 1996 purchase of 61.25 per cent of Duty Free Shoppers, and his purchase last month of the French perfume distributor Sephora, enable him to keep profit margins high by cutting out middlemen.

The acquisitions also allow him to control the conditions under which his products are sold - something he believes to be an integral part of the brands' prestige. Such savings, and complete control, are the assets he says he could bring to the drinks business if GrandMet and Guinness would accept his plan to create a company called Drinksco, combining Guinness' United Distillers, GrandMet's International Distillers and Vintners, and Moet Hennessy.

The Frenchman's disparaging comments about Guinness beer and GrandMet's food and restaurant holdings - including Pillsbury, Green Giant and Burger King - have not endeared him to his British adversaries. If the three-way marriage takes place, Mr Arnault wants to "demerge" the beer and food companies, so that Drinksco could concentrate on well-known products like Moet & Chandon champagne, Johnnie Walker whisky and Smirnoff vodka.

Snobisme may partly motivate Mr Arnault's de-merging fervour - he reportedly cannot bear the thought of Dom Perignon belonging to the same company as Burger King - but his desire to create one very big company focused on one product (wine and spirits) is in fashion.

So does Bernard Arnault have the wherewithal to beat GrandMet and Guinness? The British companies have a combined turnover four times that of LVMH, and they laughed when he demanded a 35 per cent share of the new company he proposed creating. He has since lowered his sights to 25 per cent, and the haggling has started.

Hopes of a compromise run high at the moment, but outside his negotiations with GrandMet and Guinness, Mr Arnault is prepared to use every means of pressure. He has filed a suit with the Paris-based International Chamber of Commerce, over a clause in LVMH's contract with Guinness, which would allow LVMH to buy back - at a discounted price - 17 joint venture distribution networks it shares with Guinness, as well as Guinness' 34 per cent stake in Moet Hennessy.

Last month, he doubled his stake in GrandMet to just over 11 per cent, enabling him to call a shareholders' meeting at will - referred to by the Financial Times as his "nuclear option".

Mr Arnault reportedly purchased a townhouse in London this summer. He has been spending most of his time in the city, lobbying institutional investors like Mercury Asset Management, Standard Life and Scottish Widows. GrandMet, Guinness and Mr Arnault are now locked in a battle for the hearts and minds of shareholders; both sides are trying to convince investors that their merger plan will bring greater shareholder value.

If he fails to enlist enough support, analysts predict Mr Arnault could try a few more commando raids on GrandMet shares. If he raised his participation from 11 to 25 per cent, he could kill the proposed GMG merger. It would be an expensive undertaking, but when Bernard Arnault wants something, money seems to be no object.