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The Tiffany & Co. Australian flagship store in Sydney's Pitt Street.
The Tiffany & Co. Australian flagship store in Sydney's Pitt Street.

Australian regulators stall LVMH acquisition of Tiffany & Co.

INCLUDES TIMELINE: The acquisition of international jewellery company Tiffany & Co. by Moët Hennessy-Louis Vuitton SE (LVMH) has been delayed by Australia’s Foreign Investment Review Board (FIRB).

Tiffany & Co. Australia was acquired alongside its parent company by LVMH in a $US16.2 billion ($AU25.9 billion) deal, which was approved by Tiffany & Co. shareholders in February.

The parties previously indicated that the takeover would be finalised by mid-2020, once cleared by financial regulators in the US, Canada, Australia, Mexico, the European Union, China, Japan, South Korea, Taiwan, and Russia.

However, the US Securities and Exchange Commission (SEC) was notified this week that Australia’s FIRB requires a six-month extension to review the proposal, as its mandate has been broadened due to the COVID-19 pandemic.

"The parties are cooperating closely with FIRB with a view to obtaining approval as soon as possible"

FIRB is now required to review all takeovers of Australian companies by foreign entities; previously, the threshold for review was $1.2 billion.

“In keeping with the Australian Government’s publicly announced policy of seeking six-month extensions on business applications, FIRB requested to extend its statutory review deadline of April 8, 2020 until October 6, 2020, a request LVMH has accepted,” the SEC filing said.

However, early approval may be given at the discretion of Federal Treasurer Josh Frydenberg. 

“The parties are cooperating closely with FIRB with a view to obtaining approval as soon as possible,” the filing added.

US and Canadian authorities have already approved the deal, while other international applications are in various stages of review.

Tiffany & Co. operates more than 320 international stores, including 13 in Australia. 

acquisition Timeline

15 October 2019
LVMH submits $US14.5 billion bid to acquire Tiffany & Co.

Moët Hennessy-Louis Vuiton SE (LVMH) submits an unsolicited takeover offer to the Tiffany & Co. board, valuing the US company at $US120 per share. Tiffany & Co. confirms it has received the offer on 28 October, and its share price jumps 32 per cent.

4 November 2019
Tiffany & Co. reportedly rejects the LVMH offer

Media reports, quoting sources close to the negotiation, indicate that the Tiffany & Co. board has rejected the $US14.5 billion offer as too low, yet is ‘receptive’ to a higher bid. Analysts speculate a new offer will value the company at $US130 per share.

21 November 2019
LVMH submits a higher bid: report

US financial publication Bloomberg reports that LVMH has submitted a revised offer of $US15.7 billion, though representatives for LVMH and Tiffany & Co. decline to comment. The Tiffany & Co. share price rises 3.6 per cent.

25 November 2019
Tiffany & Co. board accepts new takeover bid

The Tiffany & Co. board accepts LVMH’s offer, which values the company at $US135 per share, calling it “an exciting path forward”. The acquisition is valued at $US16.2 billion – the largest in LVMH’s history, eclipsing its $US13.1 billion acquisition of luxury fashion house Christian Dior in 2017.

4 February 2020
Tiffany & Co. shareholders approve acquisition

The offer of $US135 per share in cash is accepted by Tiffany & Co. shareholders. Bernard Arnault, CEO LVMH, says, “We look forward to welcoming Tiffany into the LVMH family and helping the brand reach new heights as an LVMH Maison.”

July 2020
Acquisition predicted to be finalised

LVMH predicts that all regulatory clearances across international markets will be granted by mid-2020, and its acquisition of Tiffany & Co. and its subsidiaries will be complete.

More reading:
LVMH acquires Tiffany & Co. for $US16.2 billion
Tiffany & Co. leaves door open to LVMH takeover
LVMH confirms plans to buy Tiffany & Co.

Morris and Watson

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