New York City — LVMH Moët Hennessy Louis Vuitton SE (LVMH), a French conglomerate and supplier of luxury goods, has agreed to acquire luxury jewelry retailer Tiffany & Co. (NYSE: TIF) for approximately $16.2 billion.
The sales price equates to $135 per share, to be paid in cash. The deal is expected to close in the second or third quarter of 2020.
LVMH, based in Paris, owns more than 70 luxury brands in the clothing, cosmetics, jewelry and spirits industries, including Dom Pérignon champagne, Givenchy clothing and perfume and Christian Dior fashion and perfume. New York City-based Tiffany & Co., which was founded in 1837, currently operates about 300 stores worldwide and employs some 14,000 people.
LVMH executives cited the opportunity to grow its watches and jewelry division in American markets as a key driver behind the acquisition. Those items account for just 9 percent of the company’s revenue stream, according to an analysis published by Deloitte earlier this year.
In addition, The Wall Street Journal reports that Tiffany has seen its sales slump over the last several years and that the 182-year-old company is focusing more on China, the leading consumer of luxury products. The acquisition by LVMH should help Tiffany capture greater shares of spending on luxury items by consumers in China, where it is also building several flagship stores.
“Following a strategic review, we have concluded that this transaction with LVMH provides an exciting path forward with a group that appreciates and will invest in Tiffany’s unique assets and strong human capital, while delivering a compelling price with value certainty to our shareholders,” says Roger Farah, chairman of Tiffany’s board of directors.
Citi and J.P. Morgan are serving as financial advisors to LVMH, while Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel. Centerview Partners LLC and Goldman Sachs Co. LLC are serving as financial advisors to Tiffany, and Sullivan & Cromwell LLP is serving as legal counsel.
Shares of LVMH stock, which trades on the Euro Stoxx 50 exchange, opened at $88.69 per share Monday, Nov. 25, up from $58.15 per share a year ago. Tiffany’s stock price opened at $132.90 per share, up from $103.73 per share in late November 2018.
— Taylor Williams