Louis Vuitton parent buying Tiffany for $16.2B

Louis Vuitton parent buying Tiffany for $16.2B

LVMH, the world's biggest luxury group, has agreed to buy Tiffany & Co, the U.S. jeweller famed for its engagement rings and white diamond necklaces, in a $16.2bn (£12.6bn) deal.

The group invested in store revamps, new product ranges and communication at the Italian jeweller, and lifted operating profits fivefold, Arnault said. LVMH is paying more than $16 billion for Tiffany.

Rumors of a potential deal began rumbling last month, prompting Tiffany to confirm it had received an unsolicited bid for $120 per share, valuing the company at $14.5 billion.

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The revised offer was the second time that LVMH raised its bid for Tiffany, which is something of a NY institution.

The companies said they expected to close the deal in mid-2020. The jewelers featured in the 1961 Audrey Hepburn film "Breakfast at Tiffany's".

The sale of the brand means change for the iconic retailer who operates a retail store at Providence Place Mall and more importantly employs hundreds at a manufacturing facility in Cumberland, RI.

The boards of directors of both companies have approved the acquisition, with Tiffany's board recommending that shareholders approve the transaction. Tiffany reports third quarter earnings on December 5.

The new price is up from $130 last week and $15 higher than the original all-cash offer delivered to Tiffany by LVMH managing director Antonio Belloni on October 18.

The addition of Tiffany to LVMH's jewellery holdings, which already include Bulgari, Chaumet, Tag Heuer and Hublot, vaults it past Swiss-based Richemont, which holds Cartier among other brands.

Cereda said LVMH can leverage these to target the Asian millennial market, which would mean a "rethinking of the current product mix and its USA footprint, in our view". According to Bain & Co., luxury jewelry sales rose 7 percent in 2018 to roughly $20 billion.

Chinese consumers in their 20s and 30s are helping to fuel growth across the luxury goods industry.

Under Chief Executive Alessandro Bogliolo, former head of fashion firm Diesel and a Bulgari alumnus, Tiffany has been building up its e-commerce business and is trying to court younger shoppers with more affordable pendants, earrings and new designs.

Centerview Partners and Goldman Sachs are Tiffany's financial advisors and New York-based law firm Sullivan & Cromwell serves as legal counsel.