US-based jewelry company Tiffany & Co. has been acquired by the world's largest luxury goods company LVMH for more than $16 billion.
Under the deal announced by both companies on Monday, the French luxury group LVMH will purchase the jeweler Tiffany & Co. for $135 per share, valuing Tiffany at about $16.2 billion.
A deal between the two companies have been expected for weeks as they confirmed in October that LVMH has made an unsolicited initial offer of $14.5 billion, which was already a premium over Tiffany's stock price at the time.
Michael Hewson, chief market analyst at CMC Markets UK, pointed out: "LVMH’s attempt to put a $14.5 billion ring on Tiffany, having already added Bulgari a couple of years ago is likely to take the fight in this sector to its closest rival Richemont, who owns Cartier, and would help LVMH in gaining better access to US markets."
The current deal is one of the largest in the history of the luxury sector and in the career of LVMH chief executive officer (CEO) Bernard Arnault, Europe's richest man.
Tiffany chairman Roger N. Farah pointed out that the deal would give the jeweler "an exciting path forward with a group that appreciates and will invest in Tiffany's unique assets and strong human capital."
On the other hand, the acquisition will boost the jewelry and watch lineup of LVMH, which currently owns legacy brands such as Hublot and TAG Heuer, as well as increase its presence in the US, which accounts to around 25% of its revenue.
Tiffany has been existing for 182 years and currently has 14,000 employees and operates 300 stores across the world but its sales have fallen in recent years. Meanwhile, LVMH has been capitalizing on its success among millennials by using influencers such as Kylie Jenner and Cardi B to attract their attention.
Tiffany and LVMH are expected to finalize the deal by mid-2020.
