Luxury Conglomerate LVMH Nearing Acquisition Deal of Tiffany & Co

It looks like luxury goods giant LVMH is getting close to an agreement to acquire another major brand to its already stellar portfolio.  This weak, the boards of LVMH and Tiffany & Co convened for a new meeting, Sunday, to finalize a deal in which LVMH would acquire the iconic jewelry brand at a price tag of more than $16 billion.  According to various reports, the companies now hope to announce the final parameters of the deal early this coming week. 

In case you did not know, LVMH is the largest luxury group in the world. For many years,  the company has maintained quite the strong grip on the high-end fashion market.  As such, this newest merger would definitely solidify the corporations move into other product areas, expanding its reach in the jewelry industry as well as with American consumers overall.  Of course, the luxury conglomerate has quite deep pockets and that also help Tiffany make a significant turnaround after a handful of rough years by helping the aging brand to better connect with customers of this generation. 

It has been reported that LVMH will pay upwards of $135 per share for the Tiffany brand.  As you might have deduced, this would make it one of the largest such deal in the history of the luxury brand sector as well as in the history of LVMH CEO Bernard Arnault.  Arnault, of course, is the richest man in all of Europe. 

The per-share offer beats an offer from the luxury conglomerate who sent an unsolicited proposal to Tiffany on October 28.  This offer was for a $120 per share, in cash, at a valuation of $14.5 billion.  At the time of the offer, it originally represented a 20 percent premium on Tiffany’s share price.  After the proposed offer, however, shares of Tiffany jumped to close last week at $126 per share.  

Reply