LVMH moves ahead with Tiffany acquisition after all

LVMH and Tiffany have ironed out their differences and finally signed a merger deal worth $15.8 billion.



LVMH (LVMH Moët Hennessy Louis Vuitton SE), the world’s leading luxury products group, and Tiffany & Co., the global luxury jeweler, have modified terms of their initial agreement and approved a $15.8bn deal for a purchase price of $131.50 per share in cash. Other key terms of Tiffany’s acquisition remain unchanged.

The modified terms also approved the scheduled Tiffany quarterly dividend payment of $0.58 per share due to be declared on November 19, 2020. The merger is expected to close in early 2021. In a joint statement, the two companies also said they would settle their litigation filed in the US state of Delaware in September, following LVMH’s bid to walk away from the deal.

Roger N. Farah, Chairman of the Board of Directors of Tiffany, commented. “We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger. The Board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing.”

Bernard Arnault, President and CEO of LVMH, commented: “This balanced agreement with Tiffany’s Board allows LVMH to work on the Tiffany acquisition with confidence and resume discussions with Tiffany’s management on the integration details. We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter.”

Tiffany Acquisition by LVMH

Tiffany & Co. Retail Mall, New York City

LVMH strikes new terms of Tiffany’s acquisition deal

The new terms of the acquisition of Tiffany would mean a discount of $425 million for LVMH, led by billionaire businessman Bernard Arnault, or less than 3% of the initial deal price.

The French company decided to rethink the deal earlier as it felt that it had overpaid for the jewelry brand, and Arnault was looking to lower the price of buying the U.S. jewelry chain.

LVMH had pulled out of the $16.2 billion deal to acquire Tiffany citing threats of heavy tariffs impositions by the US. Tiffany filed a lawsuit in a Delaware court and demanded that LVMH abide by its contractual obligation under the terms of the November 2019 merger agreement. Under the merger agreement signed by the two companies, the deal needs to be closed by latest November 24, 2020.

But LVMH said the changed circumstances were not conducive to the agreement.

Tiffany said that LVMH was using the tariffs as an excuse and wanted to renegotiate the deal because of the changed circumstances arising out of the Pandemic. All retail markets are witnessing a severe downturn and the luxury goods market has been particularly affected.

Tiffany insisted at the time that it was doing well and had a strong financial footing with a return to profitability and expectations of better revenue in its fourth quarter. Tiffany CEO Alessandro Bogliolo declared, “The fundamental strength of Tiffany’s business is clear,” he said. “The company has already returned to profitability after just one quarter of losses, and we expect our earnings in the fourth quarter of 2020 will actually exceed the same period in 2019.”

Avatar
Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

Recent Posts

Apple to launch hybrid TV set-top with speaker

Apple to launch hybrid TV set-top with speaker

Apple is bolstering its smart home devices space with the introduction of a new hybrid device— a combination of an Apple TV and a smart speaker with a screen, according to news r
2 hours ago
Leading Japanese automaker Toyota previews the future of EV – the bZ4x

Leading Japanese automaker Toyota previews the future of EV – the bZ4x

One of the most trusted pioneers of technology in the automotive sector, Toyota Motor Corp. has finally revealed the future of the EV segment by showcasing its new SUV, encompassin
2 hours ago
Mercedes unveils EQS electric sedan to rival Tesla’s models

Mercedes unveils EQS electric sedan to rival Tesla’s models

Mercedes-Benz has unveiled a battery-powered luxury car as part of the brand’s flagship S-Class saloon, designed to compete with Tesla. The 2022 Mercedes-Benz EQS is set to relea
3 days ago
Major US banks report surge in profits for the quarter

Major US banks report surge in profits for the quarter

Three major US banks —JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc.—reported earnings results for the first quarter of 2021.
3 days ago
Bitcoin Price surges above $63,000 ahead of Coinbase IPO

Bitcoin Price surges above $63,000 ahead of Coinbase IPO

Bitcoin price has once again soared over $63,000 USD as the cryptocurrency market braces for the upcoming Coinbase IPO. The San Francisco-based cryptocurrency exchange platform, wh
3 days ago
Global ETFs reach a new record of $359.2bn in 3 months of ’21

Global ETFs reach a new record of $359.2bn in 3 months of ’21

Global economy recovery is well on its path going by the money being put in the exchange traded funds, especially in the last quarter. A trillion dollars has entered the traded fun
4 days ago