Louis Vuitton Moet Hennessy (LVMH) now wants a discount on the purchase price of American jewellery firm, Tiffany & Co

Louis Vuitton Moet Hennessy (LVMH) now wants a discount on the purchase price of American jewellery firm, Tiffany & Co. The two parties struck an agreement in November 2019, but the global luxury brands conglomerate has now sought to amend the purchase price. This, after substantial losses in the COVID 19 era at Tiffany.

The initial deal stumbled when LVMH said it could no longer complete the transaction by the deadline of 24 November.

It cited French political authorities asking it to delay the acquisition until 6 January owing to a threat of new US tariffs on French products, and criticised the jeweller’s “dismal” performance during the coronavirus crisis.

Tiffany in return went and sued LVMH in a Delaware court, seeking to force the French group to honour the original deal. The case was scheduled to be heard in early January 2021.

LVMH Moët Hennessy Louis Vuitton SE (“LVMH”), the world’s leading luxury goods group, and Tiffany & Co. (NYSE : TIF) (“Tiffany”), the global luxury jeweler, have now announced that they have concluded an agreement modifying certain terms of their initial agreement (the “Merger Agreement”).

Tiffany and LVMH have also agreed to settle their pending litigation in the Delaware Chancery Court meaning the case will no longer be heard.

The new deal reflects a purchase price of $131.50 in cash and reduces the closing conditionality. Other key terms of the Merger Agreement remain unchanged.

The new price represents an overall discount of $425m for LVMH.

French billionaire Bernard Arnault, owner of LVMH, believes that his group can restore Tiffany’s fortunes.

“We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger. The Board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing,” Roger N. Farah, Chairman of the Board of Directors of Tiffany, said after the new agreement.

Bernard Arnault, President and CEO of LVMH, said: “This balanced agreement with Tiffany’s Board allows LVMH to work on the Tiffany acquisition with confidence and resume discussions with Tiffany’s management on the integration details. We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter.”

Alessandro Bogliolo, Tiffany CEO, said, “We continue to believe in the power and value of the Tiffany brand and the compelling long-term strategic and financial benefits of this combination.”

The Boards of Directors of both LVMH and Tiffany have approved the terms of the transaction and all required regulatory approvals have been obtained meaning that the deal is now set to sail.

ABOUT THE TWO COMPANIES

LVMH
LVMH Moët Hennessy Louis Vuitton is represented in Wines and Spirits by a portfolio of brands that includes Moët & Chandon, Dom Pérignon, Veuve Clicquot Ponsardin, Krug, Ruinart, Mercier, Château d’Yquem, Domaine du Clos des Lambrays, Château Cheval Blanc, Colgin Cellars, Hennessy, Glenmorangie, Ardbeg, Belvedere, Woodinville, Volcán de Mi Tierra, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle, Newton, Bodega Numanthia, Ao Yun, Château d’Esclans and Château du Galoupet.

Its Fashion and Leather Goods division includes Louis Vuitton, Christian Dior Couture, Celine, Loewe, Kenzo, Givenchy, Pink Shirtmaker, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Nicholas Kirkwood, Loro Piana, RIMOWA, Patou and Fenty. LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe, Benefit Cosmetics, Make Up For Ever, Acqua di Parma, Fresh, Fenty Beauty by Rihanna and Maison Francis Kurkdjian.

LVMH’s Watches and Jewelry division comprises Bvlgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred and Hublot.

LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine, Groupe Les Echos, Cova, Le Jardin d’Acclimatation, Royal Van Lent, Belmond and Cheval Blanc hotels.

About Tiffany & Co.
In 1837, Charles Lewis Tiffany founded his company in New York City where his store was soon acclaimed as the palace of jewels for its exceptional gemstones. Since then, TIFFANY & CO. has become synonymous with elegance, innovative design, fine craftsmanship and creative excellence. During the 20th century, its fame thrived worldwide with store network expansion and continuous cultural relevance, as exemplified by Truman Capote’s Breakfast at Tiffany’s and the film starring Audrey Hepburn.

Today, with more than 14,000 employees, TIFFANY & CO. and its subsidiaries design, manufacture and market jewelry, watches and luxury accessories – including nearly 5,000 skilled artisans who cut diamonds and craft jewelry in the Company’s workshops, realizing its commitment to superlative quality. TIFFANY & CO. has a long-standing commitment to conducting its business responsibly, sustaining the natural environment, prioritizing diversity and inclusion, and positively impacting the communities in which we operate.