Business

LVMH looks to acquire Tiffany & Co for $19.8 billion

Louis Vuitton owner LVMH has approached Tiffany & Co with a US$14.5 billion (S$19.8 billion) acquisition offer, people familiar with the matter said, at a time when the US luxury jeweller grapples with the impact of tariffs on its exports to China.

LVMH, which has for years been looking for ways to expand in the US market, submitted a preliminary, non-binding offer to Tiffany earlier this month, one of the sources said.

LVMH's offer valued Tiffany at about US$120 per share, another of the sources added. Tiffany shares ended trading on Friday at US$98.55.

Sources say Tiffany has hired advisers to review LVMH's offer but has not yet responded to it, and there is no certainty that it will negotiate a deal.

The sources asked not to be identified because the matter is confidential. LVMH and Tiffany declined to comment.

LVMH, which is behind brands such as Fendi, Christian Dior and Givenchy, as well as Veuve Cliquot champagne, has stood out for years as one of the top performers in the upscale retail sector, where not all labels are benefiting to the same degree from booming Chinese appetite for branded goods.

Tiffany, on the other hand, has not been as resilient.

Beyond the tariffs that have been triggered by the trade war between the United States and China, a lower Chinese domestic sales tax has also contributed to double-digit decreases in its sales to Chinese tourists in the US and in other destinations.

High-end brands have also long relied on Hong Kong as a major shopping hub drawing visitors from mainland China in particular, and four months of pro-democracy demonstrations are starting to take their toll.

Paris-headquartered LVMH is controlled by the Arnault family and is led by Bernard Arnault, France's richest man.

Based in New York and best known for its diamond engagement rings, Tiffany operates more than 300 retail stores globally. - REUTERS

BUSINESS & FINANCE