LVMH-Tiffany deal signed
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Subject to regulatory approvals, the LVMH-Tiffany deal is sealed: the French luxury fashion powerhouse will take over the iconic New York City-headquartered jeweler.
But it may be mid next year before the transaction is completed after shareholder and regulatory processes are complete.
LVMH will pay US$135 per share in cash for Tiffany, giving the jeweler an equity value of €14.7 billion or $16.2 billion.
The LVMH-Tiffany deal provides “an exciting path forward,” said Tiffany chairman Roger N Farah, describing LVMH as “a group that appreciates and will invest in Tiffany’s unique assets and strong human capital, while delivering a compelling price with value certainty to our shareholders”.
Bernard Arnault, chairman, and CEO of LVMH and now within striking distance of becoming the world’s richest man when this deal is settled, described Tiffany as “a company with an unparalleled heritage and unique position in the global jewelry world”.
“We have 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. 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.”
It was a quick deal, coming little more than one month after the rumors of negotiations broke and will mark the beginning of a new chapter in the 180-year-old company’s history. But the two spokesmen said completing regulatory filings and the formalities of shareholder approval might take until “mid-2020”.
With more than 300 stores worldwide, Tiffany will give LVMH a strong position in the jewelry sector in which it is underrepresented compared to luxury-goods rival Richemont. The French company says the LVMH-Tiffany deal will strengthen its watches and jewelry division and complement its huge portfolio of 75 brands. Most significantly, it gives the luxury retail group a strong presence in the key US market.
Farah said Tiffany undertook “a thoughtful internal process” and sought expert external advice before agreeing to terms with LVMH.
Questions & Answers
Q.What is the total value of the Tiffany acquisition for LVMH?
What is the total value of the Tiffany acquisition for LVMH?
LVMH will pay US$135 per share in cash for Tiffany. This gives the jeweller an equity value of €14.7 billion or $16.2 billion.
Q.When is the deal expected to be fully completed?
When is the deal expected to be fully completed?
The transaction is expected to be completed by mid-2020. This is due to the time required for regulatory filings and the formalities of shareholder approval.
Q.How will the Tiffany acquisition benefit LVMH's market position?
How will the Tiffany acquisition benefit LVMH's market position?
Tiffany will give LVMH a strong position in the jewellery sector and a significant presence in the key US market. It also strengthens LVMH's watches and jewellery division.
Q.What was the timeframe for negotiating this deal?
What was the timeframe for negotiating this deal?
It was a quick deal, with the agreement coming little more than one month after rumours of negotiations first emerged. Tiffany sought expert external advice before agreeing to terms.
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