LVMH agrees to reduced Tiffany deal

LVMH has agreed to go through with its acquisition of Tiffany & Co following a lengthy legal battle, albeit for a reduced fee. 

In an update announced yesterday (29 October) LVHM said it had concluded an agreement with Tiffany “modifying” certain terms of their initial agreement to reflect a new purchase price of $131.50 (£101.71) per share in cash and to reduce closing conditionality.

The deal was previously based off a price of $135 (£104.40) meaning the new deal equates to a $425m (£328.5m) discount valuing the new deal at $16bn (£12.3bn).

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Roger N. Farah, chairman of the board of directors of Tiffany, said. “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.”

Bernard Arnault, president and CEO of LVMH, added: “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. 

“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.”

The news comes after a legal battle between the two companies after LVMH initially backed out of the deal due to what it called “market rumours” amid the pandemic.

This led to both a lawsuit from Tiffany and a counter-lawsuit from LVMH as they both sought to see a conclusion of the deal. 

However, with an announcement of the new deal, both Tiffany and LVMH revealed they have also agreed to settle the pending litigation in the Delaware Chancery Court. The new deal is expected to be completed in Q1 of 2021.

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