Louis Vuitton Moet Hennessy (LVMH) CEO Bernard Arnault, the richest man in Europe, will close a historic luxury deal and take over the American jewelry brand Tiffany. This is stated in the statement of the European concern.
As it became known on October 29, the companies came to a new agreement to buy Tiffany. LVMH in early 2021 will acquire the jewelry brand not at $135 per share, as originally planned, but at $131.5 per share. The rest of the terms of the deal remained unchanged. The parties also agreed to resolve the situation with Tiffany's claim.
LVMH agreed to merge with the American company back in late 2019. The deal was estimated at $ 16 billion, it was planned to close it no later than November 24, 2020, but difficulties arose on both sides. First, the French authorities asked LVMH to postpone the purchase until January 2021 due to the threat of the US imposing duties on French goods. The jewelry brand also asked to postpone the deal until December 31, 2020.
LVMH said it could not complete the purchase under such conditions. In addition, the concern pointed to the deteriorating financial position of Tiffany amid the pandemic. At the end of 2020, the brand's performance will be worse than that of similar companies included in LVMH. Therefore, in the group's assessment, Tiffany has failed to meet the conditions necessary to complete the merger. Tiffany filed a lawsuit against LVMH, considering the concern's decision to avoid fulfilling the terms of the agreement. The company also did not rule out that in this way LVMH was trying to bring down the price.