LVMH confirms $16.2bn Tiffany takeover deal

Luxury goods giant LVMH has confirmed rumours that it is to acquire American jeweller Tiffany & Co for US$16.2 billion – a higher price than was originally reported and the largest acquisition in LVMH’s history.

The agreement between the two companies will see LVMH buy Tiffany for $135 per share in a deal that is expected to close in the middle of 2020, subject to approval both from regulatory authorities and Tiffany’s shareholders.

It confirms rumours circulating last month that the luxury goods powerhouse was intending to purchase Tiffany.

Tiffany’s original Manhattan store first opened in 1837 and the company now has over 300 sites around the world. Known for its pale blue boxes tied with a white ribbon, the firm unveiled its first diamond ring in 1886 and was later made famous by Truman Capote’s 1958 novella Breakfast at Tiffany’s, which was turned into a film in 1961 starring Audrey Hepburn.

According to a statement from LVMH, the acquisition will strengthen its position in jewellery and “further increase its presence in the US”. The company’s current watches and jewellery division includes brands such as Bvlgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred and Hublot.

Commenting on the deal, Bernard Arnault, chairman and chief executive officer of LVMH, said: “We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewelry world, to the LVMH family.

“We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”

Roger N. Farah, chairman of the board of directors of Tiffany, added: “Following a strategic review that included a thoughtful internal process and expert external advice, the board has concluded that this transaction with LVMH provides an exciting path forward with a group that appreciates and will invest in Tiffany’s unique assets and strong human capital, while delivering a compelling price with value certainty to our shareholders.”

Alessandro Bogliolo, chief executive officer of Tiffany, concluded: “Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth. This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming the next generation luxury jeweller. As part of the LVMH group, Tiffany will reach new heights, capitalising on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values.”

Led by the richest man in Europe, Bernard Arnault, LVMH boasts 75 luxury brands within its portfolio, over 4,590 stores and 156,000 employees.

Recent major investments include the founding of Paris-based fashion house Fenty, created by singer Rhianna, in May this year. In December 2018, it also announced plans to acquire London-based hotel and travel group Belmond.

Last month the group, which owns wine and spirits brands including Moët & Chandon, Dom Pérignon, Krug, Château Cheval Blanc, Glenmorangie, Ardbeg and Cloudy Bay, reported a positive third quarter of the year with reported growth up 10% 

In the first nine months of this year, LVMH’s drinks division reported growth of 10% to €3.9 billion, while the group as a whole has seen revenue grow 16% to €38.4bn.

Tiffany employs over 14,000 people including over 5,000 jewels and designers.

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