Editor’s Note
LVMH has confirmed a landmark $16.2 billion deal to acquire Tiffany & Co., marking a major consolidation in the global luxury sector.
LVMH Moët Hennessy Louis Vuitton, the parent company of Louis Vuitton, has confirmed an agreement to acquire the American jewelry brand Tiffany & Co. for $135 per share in cash, totaling $16.2 billion. The Financial Times reported that LVMH confirmed a deal had been reached with Tiffany.
According to Bloomberg, this marks the largest acquisition in LVMH’s history. The conglomerate’s portfolio spans high fashion (e.g., Christian Dior, Givenchy), watches and jewelry (e.g., Bulgari, Hublot), perfumes and cosmetics, wines and spirits, and selective retailing.
The final offer represents a $15 per share increase from the initial bid. On October 18, LVMH’s Managing Director Antonio Belloni first proposed an offer of $120 per share. The new price represents a 7.5% premium over Tiffany’s closing price last Friday. Previously, LVMH acquired the Italian jewelry brand Bulgari for €3.7 billion in 2011.
Tiffany had rejected LVMH’s initial offer five weeks prior, stating it significantly undervalued the company. Reuters reported that LVMH subsequently raised its bid to $130 per share (approximately $16 billion total) and persuaded Tiffany to grant confidential due diligence.
Founded in New York in 1837, Tiffany gained iconic status through its appearance in the 1961 film “Breakfast at Tiffany’s” starring Audrey Hepburn. Since 2015, Tiffany’s annual sales and profits had been declining, with a revenue recovery in 2017. As of the end of July this year, Tiffany’s revenue was $4.4 billion, down nearly 1% year-on-year, while net profit was $561 million, up 13% year-on-year. Capital IQ data shows the company employs over 14,000 people.
Market analysis firm Bain & Company forecasts a 7% growth in comparable sales for the global $20 billion market this year. Under the leadership of CEO Alessandro Bogliolo, Tiffany has been developing its e-commerce business and attempting to attract younger consumers with more affordable pendants, earrings, and new designs.