LVMH Plan to Buy Tiffany & Co. for $16.2 Billion Has Fallen Through [UPDATED] - Fashionista

LVMH Plan to Buy Tiffany & Co. for $16.2 Billion Has Fallen Through [UPDATED]

That's more than the luxury conglomerate paid to acquire Dior's couture business in 2017.
Photo: Andrew Toth/Getty Images

Photo: Andrew Toth/Getty Images

French luxury conglomerate LVMH announced Monday that it's adding another gem to its crown: American jeweler Tiffany & Co.

The conglomerate, which owns Louis Vuitton, Celine and Givenchy, sealed the deal with Tiffany to the tune of $16.2 billion, or $135 per share in cash, according to a press release. This makes Tiffany one of LVMH's most expensive acquisitions ever, costing more than the purchase of Christian Dior's haute couture business in 2017.

According to a release by LVMH, Tiffany's appeal lies in its status as "the leading luxury brand originated in the United States." 

It's also worth noting that the conglomerate describes its new acquisition as "an early proponent of sourcing... materials with a socially and environmentally responsible rigor." Considering that LVMH has been in a bit of an arms race with its rival Kering to be seen as the most sustainability-minded player in luxury, Tiffany's reputation in this arena certainly didn't hurt prospects, either.

From the Tiffany side of things, the purchase could provide the investment needed to boost the brand's profile — which despite a strong legacy, has struggled to attract new Gen Z and millennial consumers.

"We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons," said LVMH CEO and chairman Bernard Arnault. "We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come."

Though already approved by the boards of directors of both companies, the transaction will likely not be finalized until the middle of 2020, according to LVMH.

UPDATE, September 9, 2020: LVMH said it would withdraw its offer to buy Tiffany & Co., according to a report by the New York Times. Tiffany responded by filing a lawsuit intended to force the luxury conglomerate to complete the originally agreed-upon deal.

The pandemic has put real stress on the jewelry business. Furthermore, LVMH said that it received a letter from the French government asking that it delay the deal "because of the threat of U.S. tariffs on French goods." But Tiffany & Co. has countered by claiming LVMH breached its contract relating to obtaining antitrust clearance, and says the luxury giant can't avoid the deal by asserting that Tiffany & Co. is experiencing a "material adverse effect" that would've breached its own contractual obligations.

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