The companies said in a joint statement Thursday that they had amended the terms of last year’s merger agreement, reducing the price per share that LVMH will pay from $ 135 to $ 131.50. The move is now worth Tiffany at $ 15.8 billion, $ 400 million less than the originally agreed $ 16.2 billion. A legal battle for the agreement is also coming to an end.
The deal is expected to help LVMH better compete with rival Swiss jewelry retailer Richemont, strengthening its position in watches and jewelry. So far, this has been LVMH ‘s “weakest division” by some measurements, according to Luca Solca, a senior luxury analyst at Bernstein. It would also help the company strengthen its presence in the United States.
Bernard Arnault, CEO of the LVMH billionaire, described the new deal as “balanced” and said it “allows LVMH to work confidently in the acquisition of Tiffany”.
“We are as confident as ever about the huge potential of the Tiffany brand and we believe that LVMH is the right home for Tiffany and her employees,” he added.
The deal, which must be approved by Tiffany shareholders, is expected to be completed early next year.
“We are very pleased to have reached an agreement with LVMH at an attractive price and we can now proceed with the merger,” Riffer Farah, Tiffany’s president, said in a statement on Thursday. “The board concluded that it was in the interest of all our stakeholders to achieve a certainty of closure.”
Solka said the news sent a “very good message to the industry” – he reassured [people of] the trust that large teams have in the business. ”
“The LVMH and Tiffany saga seems to be over,” he added.