France’s luxury brand LVMH Moet Hennessy Louis Vuitton has reached a deal to buy US jewelry company Tiffany & Co for $16.2 billion.
Apparently, the deal will give LVMH a bigger presence in the United States. Moreover, the tie up will allow the status of Bernard Arnault, the chairman and CEO of LVMH, as the most acquisitive deal in the business.
“We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewelry world, to the LVMH family,” Arnault, the chairman and chief executive of LVMH, said in a statement.
Reportedly, Arnault had agreed to pay $135 per share for the US jeweler. This values Tiffany to 37% above the closing price before Bloomberg reported an initial result on October 26.
LVMH has 75 brands under its umbrella including Christian Dior and Dom Perignon Champagne.
According to Bloomberg Intelligence analyst Deborah Aitken, having Tiffany & Co. will double LVMH’s scale and boost its market share to more than 18%, as per Fortune.com.
“Tiffany makes sense for LVMH because of the scarcity of acquisition targets with global scale and brand appeal in jewelry, the least-crowded category in the luxury sector,” wrote Rogerio Fujimori, an analyst at RBC Europe.
The LVMH and Tiffany & Co. deal is expected to come through in the middle of 2020. Apparently, it still requires the approval of Tiffany & Co.’s shareholders.