Editor’s Note
This article reports on LVMH’s landmark $16.2 billion acquisition of Tiffany & Co., a move set to reshape the luxury jewelry landscape. The deal underscores the ongoing consolidation within the high-end sector.
LVMH has acquired the American jewelry brand Tiffany & Co. for $16.2 billion, approximately 19 trillion Korean won. According to reports from The Wall Street Journal and CNBC, LVMH and Tiffany & Co. announced an acquisition agreement at $135 per share. In a joint statement, LVMH explained,
The acquisition of Tiffany & Co. is the largest deal ever completed by LVMH.
As of October 29, LVMH had been planning to acquire the American jewelry brand Tiffany & Co. The amount proposed by LVMH was $14.5 billion, approximately 17 trillion Korean won. This price valued Tiffany & Co. stock at $120 per share, 22% higher than the closing price. Both groups acknowledged that LVMH had made a non-binding, voluntary proposal to Tiffany & Co. If the merger and acquisition had been successful, it would have been the largest acquisition in LVMH’s history after Christian Dior. This was not the first time LVMH had targeted Tiffany & Co., having shown interest before acquiring Bulgari in 2011.
So why did LVMH want to acquire Tiffany & Co.? Tiffany & Co. is one of the few independent jewelry houses in the world. According to expert analysis, it is a highly coveted acquisition target because, despite its high price, it generates significant profits thanks to its high brand recognition and the allure and image inherent to a jewelry house. Furthermore, it is understood that LVMH planned the acquisition to increase its market share in the United States, as opportunities for retail expansion in the Chinese market are dwindling.
Comparing LVMH with its competitors, LVMH appears relatively weak in the jewelry segment. Currently, the share of the luxury market held by jewelry brands is relatively low compared to the fashion segment, but there are forecasts that this share could double. Therefore, the prevailing opinion is that LVMH has sufficient reason to invest in acquiring a jewelry house. However, it remains uncertain whether Tiffany & Co., which has operated independently for a long time, would accept LVMH’s proposal. Speculation is circulating that the two groups might find a mutually beneficial point of cooperation and join hands, or that Tiffany & Co. might demand an even higher price. Attention is now focused on whether LVMH can further expand its scale by absorbing the historic American jewelry house.