LVMH company wants to buy Tiffany: details of the deal
The transnational company LVMH from France specializes in the production of luxury products. It has a large number of well-known brands, and management plans to get another one. This time, the corporation is aimed at the jewelry chain Tiffany.
The French company is negotiating the purchase of a famous American manufacturer of precious jewelry. The other day the process reached a new level – Tiffany & Co agreed to the terms of LVMH to disclose information about the company’s financial situation. The reason for this was a proposal from the owner of Louis Vuitton Moët Hennessy to increase the amount of the purchase to 16 billion dollars.
This event is a new stage in negotiations between the two major companies. Initially, LVMH was offered to pay $120 for each Tiffany share, but the management considered this amount insufficient. The agreement on disclosure of the financial statements of the American brand was reached after the price of the securities was raised to 130 dollars. Despite the fact that the management of Tiffany agreed to the terms of the French corporation, there is no final certainty in the sale of the jewelry chain. The parties do not comment on the negotiations.
This progress has not gone unnoticed by the players on the exchange. As a result, the price of Tiffany shares increased by 3.6% and reached $ 127.75.
Acquisition of the American jewelry brand is a profitable investment for LVMH Corporation. Thus, the latter will be able to strengthen its position in the market of wedding jewelry and in the segment of diamond jewelry. According to an unverified source, LVMH plans do not include the merger of brands Bulgari and Tiffany.
Despite the fact that negotiations to acquire the U.S. company are in full swing and the French corporation has competitors in the face of Kering and Richemont, the overall political picture in the world significantly affects the situation in the luxury segment. This primarily concerns the current protests in Hong Kong, which caused a decrease in sales of all market participants.
The company Tiffany & Co was founded in 1837. The distinctive mark is the turquoise color, in which the shops and packages are decorated. The range of the brand includes not only jewelry, but also perfumes, accessories, luxury stationery, leather goods.
The first store of the company is located in Manhattan, now there are thousands of branded boutiques around the world.
Tiffany & Co has made a huge contribution to the development of the jewelry segment. It is she who owns the introduction of common standards for silver samples – 925/1000, and the development of carat as a unit of weight measure for gemstones.