LVMH Plan to Buy Tiffany & Co. Is Back On [UPDATED]

The two parties agreed to a lower purchase price for the iconic jeweler.
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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.

UPDATE, October 29, 2020: The saga of LVMH and Tiffany & Co. has been full of twists and turns (and lawsuits), but it seems that it's headed towards a partnership, yet again.

On Thursday, the luxury conglomerate's acquisition of the New York jeweler seemed to be a-go once more, with the former agreeing to a lower purchase price for the latter — $131.50 per share versus $135, valuing Tiffany at $15.8 billion versus $16.2 billion — CNN reports. Both parties will also be settling pending litigation in the U.S., according to a statement

“This balanced agreement with Tiffany’s Board allows LVMH to work on the Tiffany acquisition with confidence and resume discussions with Tiffany’s management on the integration details," Bernard Arnault, president and CEO of LVMH, said. "We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter."

Roger N. Farah, chairman of the board of directors of Tiffany, added: "We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger. The Board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing."

UPDATE, January 7, 2021: On Thursday, Vanessa Friedman tweeted out major leadership changes following LVMH's acquisition of Tiffany & Co. Reed Krakoff, who joined the New York jeweler as its Chief Artistic Director in 2017, is out, as well as the company's Executive Vice President Daniella Vitale and its Chief Executive Officer Alessandro Bogliolo. 

The luxury conglomerate has replaced them with Alexandre Arnault, who will assume the title of Executive Vice President, Michael Burke as Chairman and Anthony Ledru as Chief Executive Officer. 

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