Editor’s Note
After a legal dispute, Tiffany & Co. has approved a revised merger with LVMH at a reduced price of $131.5 per share, lowering the total deal value to about $15.7 billion.
The American jeweler Tiffany & Co. has given the green light at its board meeting to resume its merger with the French giant LVMH after agreeing to a 2.6% reduction in the purchase price, ending a legal dispute between the two luxury companies.
The new acquisition price has been set at $131.5 per share, down from the $135 in the original agreement, the companies said in a statement. This will reduce the transaction amount to approximately $15.7 billion (€13.402 billion), compared to the $16.2 billion (€13.83 billion) anticipated in the initial offer. Other terms of the agreement reached in November remain unchanged, they added.
“Other key terms of the merger agreement remain unchanged,” announced the French company, emphasizing that Tiffany and LVMH also agreed to resolve their pending litigation in the Delaware (USA) court, which was scheduled to adjudicate the dispute between the two companies in January 2021.
Thus, the two companies are confident of completing the merger in early 2021, pending approval from the jewelry chain’s shareholders.
The European Commission authorized LVMH’s purchase of Tiffany this week, concluding that the operation would not have a negative effect on the European Economic Area or a substantial part of it. Although the activities of these two luxury brands overlap in the jewelry sector, the EU executive considers that the operation does not raise competition concerns because it is a market where there are already several major suppliers and to which other competitors have recently been added.
In September, the French firm decided to cancel the purchase of Tiffany, and the American company responded with a lawsuit in the US. The deal, the largest in history between two luxury firms, had been agreed before the pandemic.