After being on again, off again, the merger deal between iconic jewelry brand Tiffany & Co. and Paris luxury giant LVMH is signed, sealed and moving forward at $131.50 a share -- some $430 million less than previously agreed to, LVMH said in a statement.
Tiffany agreed to accept a reduced share price from the original $135 a share, about $425 million less overall. The value of the new takeover deal totals roughly $15.8 billion.
The deal was delayed over litigation between the two firms. Tiffany had sued LVMH for backing out of the deal because of the economic fallout caused by the coronavirus pandemic. LVMH then counter-sued.
"Tiffany and LVMH have also agreed to settle their pending litigation in the Delaware Chancery Court," the firms said in the statement.
The buyout has been approved by the boards of both companies, and it’s expected to close early next year.
Tiffany & Co. was founded in 1837 in New York City by Charles Lewis Tiffany, who also chose the famous box color known as Tiffany Blue. The brand and its NYC store became gained a place in cultural history with the 1961 film “Breakfast at Tiffany’s” starring Audrey Hepburn. The brand started struggling in recent years, in part due to the lack of Tiffany’s allure with millennials.
Roger N. Farah, chairman of the board of directors of Tiffany & Co., said the company is happy with the price and glad to be moving forward. “The Board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing,” he said.
Moët Hennessy Louis Vuitton — known as LVMH — was created in 1987 through a merger of the fashion houses. Led by billionaire Bernard Arnault, who serves as president and chief executive officer, he has said he believes the Tiffany brand will be best served with LVMH.
“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,” said Arnault.
Tiffany’s said earlier this month that it’s bouncing back from the pandemic-fueled slowdown and its most recent operating earnings spiked 25 percent from the same period in 2019.
