The company had rejected LVMH’s previous $US14.5 billion acquisition proposal, which was presented to the board in October. That deal valued Tiffany & Co. at $US120 per share, while the new deal increases the valuation to $US135 per share.
The acquisition is expected to be approved by shareholders and regulators, and will be completed by mid-2020.
Roger N Farah, chairman of the board of directors Tiffany & Co., said, “This transaction with LVMH provides an exciting path forward with 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.”
As the news was announced, Tiffany & Co.’s share price rose 6.1 per cent, to $US133.25; LVMH shares were trading 2 per cent higher, at €404.25, at the time of publication.
The deal is the largest in LVMH’s history, eclipsing its $US13.1 billion acquisition of luxury fashion house Christian Dior in 2017. Its most expensive jewellery acquisition to date is Italian brand Bulgari, which it bought for $US5.2 billion in 2011.
Tiffany & Co. was founded in 1837 and currently operates more than 320 stores worldwide. Its annual sales were $US4.4 billion ($AU6.4 billion) in 2018, with 92 per cent coming from the sale of jewellery.
Meanwhile, LVMH is the parent company of luxury fashion houses including Marc Jacobs and Givenchy, as well as Dom Pérignon champagne and beauty retailer Sephora.
The group’s annual revenue for 2018 was €46.8 billion ($AU75.3 billion); the acquisition of Tiffany & Co. more than doubles LVMH’s revenue in the watches and jewellery category.
Bernard Arnault, CEO LVMH, said, “We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewellery world, to the LVMH family.
“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. 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.”
Tiffany & Co.’s CEO, Alessandro Bogliolo – who previously held executive positions at LVMH-owned Bulgari and Sephora – said the acquisition would “provide further support, resources and momentum” as it continues to target Millennial and Gen Z consumers.
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