LVMH and Tiffany & Co. Agree on Reduced Acquisition Price
France’s LVMH will pay slightly less to acquire U.S. jeweler Tiffany & Co. after the two companies agreed to end a bitter dispute triggered by the COVID-19 pandemic and salvage the luxury sector’s biggest-ever deal. The new takeover price was set at $131.5 a share, down from $135 in the original deal, the companies said in a statement on Thursday, bringing the total price tag to about $15.8 billion. That represents an overall discount of $425 million for LVMH. Other key terms of the deal, initially agreed last November, remain unchanged, the companies added. The transaction, which has received regulatory clearance, is expected to close in early 2021, subject to Tiffany shareholder approval.
Total Retail's Take: This marks the conclusion of a bitter months-long battle between two of the leading luxury brands in the market. It will be interesting to see if the two sides can let bygones be bygones and move forward together as a unified company. As for the acrimony, it included the threat of a potential lawsuit, before Tiffany pulled back on legal intervention, as well as LVMH publicly disparaging the jeweler’s “dismal” performance during the coronavirus crisis. As for how each company figures to benefit from the union, LVMH will likely see a boost in its smallest business, the jewelry and watch division that's already home to Bulgari and Tag Heuer, helping it expand in one of the fastest-growing industry segments while also strengthening its U.S. presence. And for Tiffany, it gets a needed cash infusion and the opportunity to retain its position as the go-to seller of engagement rings, bolstered by LVMH's stronger financial positioning.