After a lot of drama, LVMH Moët Hennessy Louis Vuitton SE, has finally come to an agreement with Tiffany & Co. and has settled to take over the iconic jewellery brand for $15.8 billion, $ 400 million less than what was decided upon in the original deal. The deal is pegged as the biggest luxury brand acquisition ever.
As per the amended deal, LVMH will purchase the American jeweller for $131.5 per share in cash instead of $135 per share, totalling $16.2 billion. Other key terms of the merger remain unchanged.
Known for its fine jewellery, especially diamond engagement rings Tiffany & Co.’s performance was impacted by the pandemic. As a result, LVMH backed out of the deal in September 2020, citing trade tensions between France and USA. This led to both sides filing lawsuits.
The two brands, released a joint statement, stating that they have agreed to settle their pending litigation in the Delaware Chancery Court.
Roger N. Farah, Chairman of the Board of Directors of Tiffany, commented. “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.”
As per the agreement, Tiffany’s quarterly dividend of $0.58 per share due to be declared on November 19, 2020 will be declared and paid. This was earlier a bone of contention with LVMH. The merger is expected to close in early 2021, subject to Tiffany shareholder approval and customary closing conditions.
Bernard Arnault, President and CEO of LVMH, commented: “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.”
Tiffany & Co. will join the 75 brands under the LVMH umbrella spread across 6 sectors – wine & spirits, fashion & leather goods, perfumes & cosmetics, watches & jewellery, selective retailing and other activities. The merger will strengthen LVMH’s position in North America and build on the brand’s value in the jewellery market.