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Louis Vuitton owner LVMH to buy Tiffany for $16bn Louis Vuitton owner LVMH to buy Tiffany for $16bn
(about 1 hour later)
Bernard Arnault’s luxury goods empire to acquire US jeweller in cash dealBernard Arnault’s luxury goods empire to acquire US jeweller in cash deal
LVMH, the world’s biggest luxury group, has agreed to buy Tiffany & Co, the US jeweller famed for its engagement rings and white diamond necklaces, in a $16.2bn (£12.6bn) deal.LVMH, the world’s biggest luxury group, has agreed to buy Tiffany & Co, the US jeweller famed for its engagement rings and white diamond necklaces, in a $16.2bn (£12.6bn) deal.
Bernard Arnault’s luxury goods empire, which includes brands such as Louis Vuitton, Dior and Moët & Chandon, announced it would pay $135 a share in cash. It said the deal would transform its watches and jewellery division, its latest addition to its 75 key brands known as “maisons” or houses. Bernard Arnault’s luxury goods empire, which includes brands such as Louis Vuitton, Christian Dior and Moët & Chandon, announced it would pay $135 a share in cash.
Founded in 1837 when Charles Lewis Tiffany opened the first store in downtown Manhattan, Tiffany now has more than 300 stores around the globe. Its flagship store featured in the film Breakfast at Tiffany’s, where Audrey Hepburn’s Holly Golightly character mused “nothing very bad could happen to you”. LVMH said the deal would transform its watches and jewellery division, which includes Bulgari, TAG Heuer and Hublot, and boost its presence in the US. It is the latest addition to the group’s 75 big brands, known as “maisons” or houses.
Arnault, Europe’s richest man who is the chairman and chief executive of LVMH, said: “We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our maisons. Founded in 1837 when Charles Lewis Tiffany opened the first store in downtown Manhattan, New York, Tiffany now has more than 300 stores worldwide and employs more than 14,000 people.
Its flagship store featured in the film Breakfast at Tiffany’s, where Audrey Hepburn’s Holly Golightly character mused “nothing very bad could happen to you”. Tiffany’s engagement rings range from £1,425 for a platinum band to £43,400 for a double-halo ring with pink diamonds.
It is LVMH’s biggest takeover under the 32-year reign of Arnault, its 70-year-old chairman, chief executive and majority shareholder, who has amassed a vast number of wine, spirit, fashion, leather, perfume, cosmetics and watch brands ranging from Dom Pérignon, Veuve Clicquot and Krug champagne to Givenchy, Kenzo and Marc Jacobs fashion.
Arnault, Europe’s richest man, said: “We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our maisons.
“We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”“We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”
Alessandro Bogliolo, the Tiffany & Co chief executive said: “As part of the LVMH group, Tiffany will reach new heights, capitalising on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values.” Hard luxury – watches and jewellery – is the only sector where LVMH is not leader. The world’s biggest luxury groups are racing to buy up smaller brands as they compete for younger customers and high-spending Chinese consumers. Tiffany is a well-recognised jewellery brand in China.
LVMH first approached Tiffany in late October with a $14.5bn bid but this was rejected as too low. Rogerio Fujimori, an analyst at Royal Bank of Scotland, said: “Tiffany makes sense for LVMH because of the scarcity of acquisition targets with global scale and brand appeal in jewellery, the least crowded category in the luxury sector.
“Tiffany could be highly complementary to LVMH’s hard luxury portfolio because Tiffany has a broader consumer base than Bulgari thanks to its higher exposure to more affordable price points given its well-established silver jewellery offer.”
LVMH first approached Tiffany in late October with a $14.5bn bid but this was rejected as too low. The higher offer has been approved by the boards of both companies and still needs the backing of shareholders. The deal is expected to be completed in the middle of next year.
Alessandro Bogliolo, the Tiffany chief executive, said: “As part of the LVMH group, Tiffany will reach new heights, capitalising on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values.”