BREAKING: LVMH Buys Tiffany & Co. For $16 Billion

PARIS, FRANCE — Last month (October 2019), DM Fashion Book reported that LVMH Moët Hennessy Louis Vuitton is interested in buying American luxury brand Tiffany & Co. (see it here).

The French luxury conglomerate has held takeover talks with Tiffany & Co.

The world’s largest luxury goods group – which owns fashion brands like Louis Vuitton, Dior, Givenchy, and Celine, as well as ventures, such as Sephora, watchmakers Hublot and Tag Heuer, and a long list of Wines & Spirits companies – is said to be looking to expand its jewelry offerings further by way of an acquisition of Tiffany & Co.

Today, Monday (November 25), it was announced luxury giant LVMH Moët Hennessy Louis Vuitton SE has reached a $16.2 billion deal to buy American jeweller Tiffany & Co, reported BoF.

The two companies announced that they had entered an agreement for LVMH to acquire Tiffany for $135 a share — a multi-billion dollar bet that the LVMH can restore Tiffany’s faded shine.

The all-cash acquisition is one of the largest ever for the French conglomerate known for its hard-charging deal-making and surpasses its $13 billion deal for Christian Dior in 2017. LVMH initially offered $14.5 billion for Tiffany, when we first reported, but the company said the offer was too low.

The storied American brand has had a difficult time lately. The American jeweller is facing weak demand at home and abroad, and will likely need heavy investment to re-energize its brand and business.

It’s been updating its store experience, and recently hired former Barneys chief executive Daniella Vitale to reposition its brand identity. While the company continues to grow in China, it has struggled to win over Millennials and Gen-Z consumers in the West, as young shoppers move away from traditional occasion-based gifting and self-purchasing rises in popularity. In the first half of 2019, worldwide net sales at Tiffany decreased 3 percent to $2.1 billion.

The deal will bring LVMH’s substantial financial and market clout to help support Tiffany’s ongoing transformation efforts. At the same time, it boosts the French company’s presence in the US market.

The deal also allows LVMH to gain further ground on Swiss conglomerate Richemont, which has long dominated hard luxury with its ownership of Cartier and Van Cleef & Arpels.

LVMH’s shares were up nearly 2 percent in early morning trading. The deal is expected to close in mid-2020 subject to approval from Tiffany’s shareholders.

Photos Credit: Yana Paskova/Getty Images

Source: BoF