LVMH, the French company behind Louis Vuitton and Dior, is finally buying Tiffany & Co. after all – at a US$425 million discount

Oct 30, 2020

After suits and counter lawsuits, the Tiffany-LVMH deal looks like it’s finally back on. Photo: Agence France-Presse

The planned merger between the iconic New York jewellery brand and billionaire Bernard Arnault’s luxury conglomerate went sour during the Covid-19 pandemic – but now a truce, and a discount price, has reportedly been agreed

Tiffany & Co.’s board have approved an agreement to revive its sale to LVMH, according to people familiar with the matter, giving the French luxury conglomerate a US$425 million discount from the original price.

The Paris-based company will pay US$131.50 per share for the US jeweller, down from the original US$135, the people said. The total cost of the original agreement was about US$16 billion. Bloomberg News and other media reported earlier that the two were close to reaching an agreement on a new deal.

Tiffany & Co.’s flagship store in New York. Photo: Kyodo

Bloomberg reported that Tiffany sought around US$132 per share as a compromise price, citing people familiar with the matter. The jeweller also likely wanted a guarantee that LVMH wouldn’t back out of any revised deal, after the Louis Vuitton owner said in September it could not complete the acquisition because of a French government request.

Tiffany shares erased losses on October 28, rising 0.8 per cent to US$129.95 in New York. Representatives for the jeweller and LVMH declined to comment the following day.

The headquarters of luxury jewellery Tiffany & Co. on 5th Avenue in Manhattan, New York. Photo: Agence France-Presse

The compromise ends a year-long saga involving a bitter war of words, French government intervention and lawsuits in the US. By striking a new deal, the companies can avoid a courtroom battle that was set for January 2021 in Delaware.

However, the original deal’s closing date of November 24 would not be met, according to a person familiar with the matter.

LVMH Chairman and chief executive Bernard Arnault addresses his team at LVMH headquarters in Paris. Photo: Agence France-Presse

Adding Tiffany will give LVMH’s billionaire chairman Bernard Arnault a major boost in the global jewellery market, allowing the billionaire to challenge Cartier owner Richemont for supremacy as the luxury industry begins to recover from a turbulent 2020. At LVMH, Tiffany would join a portfolio of high-end brands that include Dior, Givenchy and Bulgari.