Louis Vuitton group buys Tiffany jewelry for 14.7 billion

The world had breakfast this Monday with diamonds from Tiffany & Co. Or, rather, with the acquisition of the iconic American jewelry by the French luxury group LVMH (Louis Vuitton Moët Hennessy), which announced from Paris what has already become the largest purchase in the history of the Gallic millionaire group Bernard Arnault.

"We are happy to welcome Tiffany into the LVMH family," said the richest man in France, confirming a deal that had been rumored for weeks and that has finally closed at $135 per share, at a final cost of about $14,700. millions of euros. The operation will be closed definitively in mid-2020, both parties indicated in a joint statement.

With Tiffany, LVMH becomes a brand "associated with the most beautiful love stories", the two companies celebrated in reference to the fame of the New York jeweler founded in 1837 by Charles Lewis Tiffany in Manhattan and immortalized in works such as Truman's novel Capote Breakfast at Tiffany's (Breakfast at Tiffany's) who, since his jump to the cinema in the homonymous film in 1961 with Audrey Hepburn as the protagonist, is considered one of the romantic references of the big screen.

More presence in the US

"Its diamonds of exceptional quality have been admired for generations and its legendary creations are the ultimate reference in jewelry. Its famous blue box, the Tiffany Blue Box, is recognized throughout the world as an icon of refinement and desirability," both parties added. . But if Tiffany and LVMH have closed an agreement, it is not only because of their famous diamond engagement rings that are recognizable in half the world. With this acquisition, the French group, owner of 75 fashion, beauty and luxury brands, intends to strengthen its presence in the United States, at a time when jewelry is facing difficulties arising from the trade war between the US and China, which are harming its exports to the Asian giant.

Tiffany "is a well-known brand, one of the few global brands that enjoys strong historical recognition, in the United States, because it is obviously its first market, but also in Asia," Arnault told Agence France Presse.

Tax cuts in China have weighed on sales at Tiffany's stores in the US and elsewhere, as Chinese shop at home and tourists shop in China. Thus, it obtained a net profit of 261.5 million dollars (236 million euros) in the first half of its fiscal year, until August, 8.9% less than a year before. The unrest in Hong Kong, which has lasted for more than four months, has also affected the sales of both companies.

According to the Chairman of the Board of Directors of the American jeweler, Roger N. Farah, the conclusion has been reached that "this transaction opens up very promising prospects with LVMH, a group that knows how to appreciate Tiffany's strengths and will know how to invest in its equipment and its unique assets, all while offering an attractive price and secure value to its shareholders.

The world's largest luxury operation

"We have the ambition to make this emblematic brand shine with all the care and all the determination that we have put into all the houses that have joined us throughout our history," Arnault said of the purchase, with the that his group seeks to obtain "a new dimension for the watch and jewelery section of LVMH". The operation in fact expands LVMH's presence in the jewelery sector, in which it already has the Italian Bulgari —for which it paid some 4,700 million euros in 2011— and in which it ranks behind the Richemont group, Cartier owner.

The French group that runs the Arnault family, the wealthiest in France, dominates the world luxury market, with brands such as those that give it its name and others such as Fendi, Givenchy, Kenzo or Loewe and a turnover that reached 38,400 million euros. in the first nine months of this year, 16% above the same period last year. The French company, which also owns the Louis Vuitton, Dior brands or champagne cellars such as Moët & Chandon or Veuve Clicquot, made a first offer last October, with a price of 120 dollars per share (about 108 euros), which has been now improved.

The operation has the approval of the French Government. The Minister of the Economy, Bruno Le Maire, celebrated an agreement on social networks that constitutes "excellent news for strengthening the position of the group (LVMH) in the US and for the projection of the French luxury and fashion sector throughout the world"./