Editor’s Note
This article reports on LVMH’s landmark acquisition of Tiffany & Co. for approximately €14.7 billion, the largest in the French luxury group’s history.
The French luxury group LVMH (Louis Vuitton Moët Hennessy) announced from Paris the acquisition of the iconic American jeweler Tiffany & Co. for a final cost of approximately 14.7 billion euros. This marks the largest acquisition in the history of the group led by French billionaire Bernard Arnault.
said the richest man in France, confirming a deal rumored for weeks and finally closed at $135 per share. Both parties stated in a joint release that the transaction will be definitively completed by mid-2020.
With Tiffany, LVMH gains a brand “associated with the most beautiful love stories,” celebrated the two companies, referencing the fame of the New York jeweler founded in 1837 by Charles Lewis Tiffany in Manhattan and immortalized in works like Truman Capote’s novel Breakfast at Tiffany’s. Since its leap to the big screen in the 1961 film of the same name starring Audrey Hepburn, it has been considered one of the romantic references of cinema.
added both parties.
But if Tiffany and LVMH have closed a deal, it is not only for its famous diamond engagement rings recognized around the world. With this acquisition, the French group, owner of 75 fashion, beauty, and luxury brands, aims to strengthen its presence in the United States, at a time when the jewelry sector faces difficulties stemming from the trade war between the US and China, which harms its exports to the Asian giant.
said Arnault in statements to Agence France-Presse.
Tax cuts in China have weighed on sales at Tiffany stores in the US and other destinations, as Chinese consumers buy at home and tourists buy in China. Thus, it reported a net profit of $261.5 million (236 million euros) in the first half of its fiscal year, through August, 8.9% less than a year earlier. The unrest in Hong Kong, now lasting more than four months, has also affected sales for both companies.
said Roger N. Farah, Chairman of the Board of the American jeweler.
assured Arnault regarding the purchase, with which his group seeks to gain “a new dimension for the watches and jewelry division of LVMH.” The deal in fact expands LVMH’s presence in the jewelry sector, where it already counts the Italian Bulgari — for which it paid about 4.7 billion euros in 2011 — and where it sits behind the Richemont group, owner of Cartier.
The French group led by the Arnault family, the wealthiest in France, dominates the global luxury market, with brands like those that give it its name and others such as Fendi, Givenchy, Kenzo, or Loewe, and revenue that reached 38.4 billion euros in the first nine months of this year, 16% above the same period last year. The French company, also owner of the Louis Vuitton and Dior brands or champagne houses like Moët & Chandon or Veuve Clicquot, made an initial offer last October at a price of $120 per share (about 108 euros), which has now been improved.
The operation has the approval of the French government. The Minister of Economy, Bruno Le Maire, celebrated on social media an agreement that constitutes “excellent news for strengthening the group’s (LVMH) position in the USA and for projecting the French luxury and fashion sector worldwide.”
