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LVMH has increased its takeover offer to $US16 billion in an effort to acquire Tiffany & Co.
LVMH has increased its takeover offer to $US16 billion in an effort to acquire Tiffany & Co.

Tiffany & Co. likely to approve new $US16 billion LVMH offer

The board of international jewellery company Tiffany & Co. is close to accepting a new $US16 billion takeover bid from Moët Hennessy-Louis Vuitton SE (LVMH).

The company rejected the French conglomerate’s previous $US14.5 billion acquisition proposal, which was presented to the board in October. That deal valued Tiffany & Co. at $US120 per share, while the new deal increases the valuation to $US135 per share.

At the time of publication, Tiffany & Co. was trading at $US125.51.

Alessandro Bogliolo
Alessandro Bogliolo
“When you talk about big luxury brands, some of them are extremely successful, and are part of big groups… But you have other brands that are super brands, super powerful, that are not part of big groups”
Alessandro Bogliolo, Tiffany & Co.

According to recent news reports, if accepted, the deal would be the largest in LVMH’s history, including its $US13.1 billion acquisition of luxury fashion house Christian Dior in 2017. Its most expensive jewellery acquisition to date is Italian brand Bulgari, which it bought for $US5.2 billion in 2011.

Tiffany & Co. currently operates more than 320 stores worldwide. Its annual sales were $US4.4 billion ($AU6.4 billion) in 2018, with 92 per cent coming from the sale of jewellery.

However, its most recent quarterly earnings report noted sales had decreased in its largest market – the US – as well as Asia-Pacific (including China) and Europe.

When asked whether Tiffany & Co. would benefit from being part of a luxury conglomerate, CEO Alessandro Bogliolo – who previously held an executive position at Bulgari – would not be drawn.

“When you talk about big luxury brands, some of them are extremely successful, and are part of big groups; consider [Louis] Vuitton, consider Cartier. But you have other brands that are super brands, super powerful, that are not part of big groups; consider Chanel, consider Hermès. I don’t think there is a magic formula,” he said.

LVMH’s annual revenue for 2018 was €46.8 billion ($AU75.3 billion); the acquisition of Tiffany & Co. would more than double LVMH’s revenue in the watches and jewellery category.


More reading:
Tiffany & Co. leaves door open to LVMH takeover
LVMH confirms plans to buy Tiffany & Co.
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Monday, 16 December, 2019 12:23am
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