LVMH and Tiffany & Co strike new terms for acquisition

The new deal is expected to close in early 2021

FRANCE/US. LVMH Moët Hennessy Louis Vuitton and Tiffany & Co have have struck an updated agreement that will allow the acquisition of the US jeweller to proceed.

The new deal reflects a lower price of US$131.50 per share in cash, or a valuation of around US$15.8 billion. The original acquisition valued Tiffany & Co at US$135 per share in cash.

Both parties have also agreed to settle their pending lawsuits at the Delaware Chancery Court. The Board of Directors of both LVMH and Tiffany & Co have agreed the terms, with all regulatory approvals already obtained.

The adapted Merger Agreement states that the regularly scheduled Tiffany quarterly dividend of US$0.58 per share — due to be declared on 19 November 2020 — will be declared and paid. The acquisition is expected to close in early 2021, subject to Tiffany shareholder approval and customary closing conditions.

After weeks of court action, the French luxury powerhouse and US jewellery house finally struck an adapted deal which reflects a reduced share price

LVMH President and CEO Bernard Arnault said, “This balanced agreement with Tiffany’s Board allows LVMH to work on the Tiffany acquisition with confidence and resume discussions with Tiffany’s management on the integration details. We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter.”

“We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger,” commented Tiffany & Co Chairman of the Board of Directors Roger N. Farah. “The Board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing.”

“LVMH is the right home for Tiffany” says LVMH President & CEO Bernard Arnault as the two parties strike a modified merger agreement

Tiffany & Co CEO Alessandro Bogliolo added, “We continue to believe in the power and value of the Tiffany brand and the compelling long-term strategic and financial benefits of this combination.”

As reported, LVMH announced in September that was no longer completing the acquisition of Tiffany & Co, due to complications surrounding the deal. This included a warning by the French European and Foreign Affairs minister related to the threat of taxes on French products by the US.

As a result, the US jewellery firm filed a lawsuit in the Court of Chancery of the State of Delaware, seeking an order which would require LVMH to abide by its contractual obligation to complete the transaction on the agreed terms. LVMH also filed a counter-lawsuit in response to Tiffany & Co’s litigation.

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