Editor’s Note
LVMH has officially confirmed its acquisition of Tiffany & Co. in a landmark $16.2 billion deal, solidifying its position in the luxury jewelry market. This strategic move underscores the ongoing consolidation within the global luxury sector.
On November 24, LVMH Moët Hennessy Louis Vuitton, the parent company of Louis Vuitton, 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 it had reached an agreement with Tiffany.
According to Bloomberg, this is the largest acquisition in LVMH’s history. LVMH’s diversified portfolio spans from high fashion brands like Christian Dior and Givenchy, to watch and jewelry brands like Bulgari and Hublot, as well as perfumes, cosmetics, wines, spirits, and selective retailing.
The new acquisition price represents a $15 per share increase from the initial offer. On October 18, Antonio Belloni, Managing Director of Louis Vuitton, first made an offer at $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 previously rejected LVMH’s initial offer from five weeks ago during consultations, 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 allow confidential due diligence.
Founded in New York in 1837, Tiffany gained fame 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 recovery in revenue occurring 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. According to Capital IQ data, the company employs over 14,000 people.
Consulting firm analysis cited by Reuters indicates that the jewelry industry was one of the strongest performing sectors in the luxury goods industry in 2018. Market analysis firm Bain & Co. 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.
