Luxury giant LVMH is close to sealing the deal of buying the US jewelry chain Tiffany for more than USD 16 billion. The two companies can formally announce the deal in a couple of days. They apparently reached to an agreement after LVMH increased its offer to USD 135 per share. In October last year, the price offered was around USD 120 per share in cash. However, the shares jumped to USD 126 soon after reports about the deal emerged. Many analysts had suggested that the initial deal slightly undervalued Tiffany. But they strongly believed that joining LVMH would be a good move for the US jewelry chain. The owner of Bulgari and Louis Vuitton has decided to purchase Tiffany to make its presence even stronger in high-end fashion. LVMH, the world’s largest group, is trying to tap the fast-growing luxury jewelry market.
Tiffany, the 182-year-old New York jeweler, has around 3000 stores around the globe and employs 14,000 people. The company was found in 1837 and featured in the movie Breakfast at Tiffany’s. The movie starring Audrey Hepburn was released in 1961. But its sales slumped in recent years as it struggled hard to connect with millennial consumers. Tiffany under the leadership of CEO Alessandro Bogliolo has been building its e-commerce business. Bogliolo is the former head of fashion firm Diesel and an alumnus of Bulgari. LVMH, which continued to enjoy much more success, will help the company to court younger shoppers.
The deal will also help LVMH expand its reach in the jewelry business and solidify its stand into other product areas. This will be the company’s largest takeover ever in the history of the luxury sector. It is also the biggest deal in the career of LVMH CEO Bernard Arnault. Arnault is the richest man in Europe. Arnault has been eying for the Tiffany ever since he purchased Bulgari. LVMH purchased Bulgari, which is famous for its jewelry, watches, fragrances, in 2011 for 3.7 billion Euros. The company was founded in 1884 by the silversmith Sotirios Boulgaris.