Business

LVMH buys Tiffany for $22 billion

PARIS: LVMH and US jeweller Tiffany & Co announced yesterday a US$16.2 billion (S$22 billion) tie-up that is the French luxury group's biggest acquisition yet and will bolster its presence in the United States.

The deal comes after LVMH spent more than a month wooing Tiffany.

The companies said in a statement they "have entered into a definitive agreement whereby LVMH will acquire Tiffany for US$135 per share in cash, in a transaction with an equity value of approximately €14.7 billion or US$16.2 billion".

The deal adds Tiffany to LVMH's extensive stable of luxury brands that include Louis Vuitton, Dior and Moet & Chandon and will strengthen its position in the jewellery sector.

"We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewellery world, to the LVMH family," said the group's chief executive Bernard Arnault.

Such a deal has been seen as a way ahead for Tiffany, which has trailed rivals in terms of sales growth in recent years.

"Following a strategic review that included a thoughtful internal process and expert external advice, the board has concluded that this transaction with LVMH provides an exciting path forward..." said Tiffany board chairman Roger Farah.

Tiffany, founded in 1837 and headquartered on 5th Avenue in New York, is one of the most iconic US luxury brands, an image reflected in the Breakfast At Tiffany's novella by Truman Capote, made into a film with Audrey Hepburn in 1961.

Tiffany's shares closed trading on Friday at US$125.51. They were trading around US$90 per share at the beginning of October, before LVMH first began to make overtures to Tiffany's management.

The companies said they expect the transaction to close in the middle of next year following approval by Tiffany's shareholders and regulators. - AFP

BUSINESS & FINANCE