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LVMH Set to Acquire Luxury Jeweler Tiffany for $16.2 Billion

“Breakfast at Tiffany’s” might be firmly entrenched as an iconic piece of cinematic Americana, but now the luxury jewelry chain forever linked to Audrey Hepburn’s Holly Golightly comes with a decidedly French twist.

LVMH Moët Hennessy Louis Vuitton’s chairman and CEO Bernard Arnault just gave himself an early holiday present–a $16.2 billion deal to acquire American luxury jewelry retailer Tiffany & Co.

LVMH said on Monday that it will acquire the global luxury jeweler in a cash deal at $135 a share, or a total value of 14.7 billion euro ($16.2 billion).

“Tiffany will strengthen LVMH’s position in jewelry and further increase its presence in the United States,” LVMH said. “The addition of Tiffany will transform LVMH’s Watches and Jewelry division and complement LVMH’s 75 distinguished Houses.”

The deal includes Tiffany’s flagship store on Fifth Avenue in Manhattan, a 124,000-square-foot space that the retailer acquired in 1999 for about $94 million.

“We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons,” Arnault said. “We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”

Tiffany’s has been in the French billionaire’s sights since as early as June 2007, when he first considered acquiring the firm, according to an investment banker who said Arnault has coveted the brand as he looked to expand his watch and jewelry empire.

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Tiffany, which wasn’t interested in an acquisition at the time, instead entered into a joint venture agreement with Swatch. The luxury jewelry firm hoped the Swiss watch brand could provide expanded distribution for Tiffany & Co. branded watches, as well as some Swiss watch-making know-how. That venture broke up in 2011, with both sides leveling legal claims against the other and Tiffany paying Swatch $449 million to settle their break-up disputes.

LVMH went on to complete other deals, such as its $5.2 billion deal for Italian luxury jewelry firm Bulgari in 2011. LVMH has also invested this year in streetwear brand Madhappy and in Stella McCartney. It also went deeper into the luxury hospitality sector in April when it completed its acquisition of Belmond, which was disclosed in December 2018.

The Paris-based luxury leader has also tried to acquire Hermes and Chanel in the past. Then it again made an initial foray towards Tiffany with an opening offer of $120 a share, or $14.5 billion, last month. Investors had been hoping for a higher bid, which followed at $135 a share. The investment banker, who is not connected to the deal, said he wasn’t aware of anyone else looking to buy the iconic American jewelry firm.

Tiffany’s board of directors has already approved the transaction, and it is recommending that shareholders also approve the deal. The transaction, expected to close in the middle of 2020, is subject to customary closing conditions, including the nod of Tiffany’s shareholders and regulatory approvals.

Roger N. Farah, chairman of Tiffany’s board, said, “Following a strategic review that included a thoughtful internal process and expert external advice, the Board has concluded that this transaction with LMVH provides an exciting path forward with a group that appreciates and will invest in Tiffany’s unique assets and strong human capital, while delivering a compelling price with value certainty to our shareholders.”

Tiffany CEO Alessandro Bogliolo, added, “Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth. This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming The Next Generation Luxury Jeweler.”

Charles Lewis Tiffany founded Tiffany in 1837 when he opened the first store in downtown Manhattan, now one of more than 300 stores around the globe. The name is synonymous with innovative design, fine craftsmanship and exceptional gemstones, as well as the brand’s commitment to sustainability.