Louis Vuitton (LVMH) has announced a “definitive” agreement with Tiffany and Co., whereby it will acquire the luxury jewellers for $16bn (£12.5bn), or $135 (£105) per share in cash.
This is higher than the original offer, which proposed that each share was bought for $120 (£93), valuing Tiffany’s overall business at $14.5bn (£11.3bn).
LVMH said the acquisition will transform its watches and jewellery division, which includes Bulgari, TAG Heuer and Hublot, and “strengthen” its overall position in the jewellery sector, as well as boost its presence in the United States.
It said that the addition of Tiffany would also “complement” its 75 other houses, which include Moët & Chandon, Dom Pérignon, Christian Dior and Givenchy. This agreement marks the biggest takeover yet for the world’s largest luxury goods brand.
The move was approved by the board of directors for both companies, and the transaction is expected to be finalised by mid-2020. Approval from Tiffany’s shareholders and regulatory bodies is still required.
Bernard Arnault, chairman and CEO of 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.”
He added: “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.”
Roger N. Farah, chairman of the board of directors at Tiffany, said: “Following a strategic review that included a thoughtful internal process and expert external advice, the board has concluded that 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.”
CEO of Tiffany, Alessandro Bogliolo, added: “Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth.
“This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming The Next Generation Luxury Jeweller.”
He added: “As part of the LVMH group, Tiffany will reach new heights, capitalizing on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values.”
Founded in 1837 by Charles Lewis Tiffany, Tiffany and Co. has over 300 stores worldwide, and employs more than 14,000 workers. The brand is famed for its diamond engagement rings, and gained worldwide popularity after the release of the 1961 film ‘Breakfast at Tiffany’s’.