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25.11.2019 Europe

French luxury giant LVMH gobbles up Tiffany’s for €14.7 billion

Reuters/Stephane Mahe
NOV 25, 2019 EUROPE

LVMH announced Monday that it is buying the US jeweller Tiffany's in a deal that gives it the world's largest share in the luxury global jewellery market.

The deal comes after LVMH spent more than a month wooing Tiffany & Co, an iconic US luxury brand known colloquially as Tiffany's and famous for its wedding rings and diamonds.

“It is an emblematic brand, an American icon that will become a little bit French,” LVMH's chief executive and France's wealthiest person Bernard Arnault told French news agency AFP agency. “It has lots of potential and an incredible history.”

Tiffany was founded in 1837 and its headquarters sit next to the Trump Tower on the glamorous Fifth Avenue in New York City. It is referred to in the title of Truman Capote's novel Breakfast at Tiffany's, which was made into a film with Audrey Hepburn in 1961.

The companies said in a joint statement that LVMH would acquire the company for 135 USD per share in a deal worth about 16.2 billion USD or 14.7 billion euros.

LVMH becomes jewellery leader
LVMH already owns luxury brands Louis Vuitton, Dior and Moet & Chandon. Its jewellery holdings include Bulgari, Chaumet, Tag Heuer and Hublot.

The deal makes LVMH the leader in the worldwide jewellery market, according to Euromonitor International data from 2017.

Swiss-based Richemont previous held the largest percentage of market share with 14.8 percent in 2017, with Tiffany's at 10.8 percent and LVMH at 7.5 percent.

Tiffany has trailed rivals in terms of sales growth in recent years and is expected to benefit from LVMH's global network and promotional power

“Following a strategic review that included a thoughtful internal process and expert external advice, the Board has concluded that this transaction with LVMH provides an exciting path forward,” said Roger Farah, Tiffany board chairperson.

LVMH is the world's largest luxury group, posting record sales of 46.8 billion euros in 2018 for a net profit of 7 billion euros.

(with newswires)