French LVMH reaches a merger agreement with Tiffany

Paris: French luxury goods giant LVMH and US jeweler Tiffany Thursday overcome their differences in a bitter takeover battle, and agreed to lower the merger price so the deal could go ahead.

The French group said in a statement that Tiffany had agreed to accept a lower price than LVMH in order to close the deal and prevent it from collapsing.

She added, “LVMH, the world’s leading luxury product group, and Tiffany, the global luxury jewelry maker, announced today that they have entered into an agreement to amend certain terms of their initial agreement to reflect a purchase price of $ 131,500 (per share) in cash and to reduce the closing terms.”

The group emphasized that “the other main provisions of the merger agreement remain unchanged.”

The two parties had previously set the deal’s price at $ 135 a share.

Under the revised share price, the deal would be worth about $ 15.77 billion, down by about $ 425 million based on the number of Tiffany’s shares in US securities documents.

LVMH, the parent company of luxury brands such as Louis Vuitton and Dior, has announced its plan to acquire Tiffany from Robin at the end of 2019.

But the French company backed away from its proposal last month, citing a series of bad decisions by Tiffany’s board of directors since the deal was unveiled late last year.

Tiffany said there was no viable basis for canceling the deal and filed a complaint in a Delaware court, while LVMH responded with a counterclaim.

The US court set January 5, 2021, as the date for the start of the case, while a Delaware judge urged the parties to hold bilateral talks to avoid litigation.

“This balanced agreement with Tiffany’s board of directors allows LVMH + to work on acquiring Tiffany with confidence and to resume discussions with Tiffany’s management regarding details of the merger,” said Bernard Arnault, CEO of the French company.

“We are more convinced than ever of the tremendous potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and her staff during this exciting next chapter,” he added.

In turn, Tiffany Chairman Roger Farah said, “We are very happy to have reached an agreement with LVMH at an attractive price and that we can now proceed with the merger.

The transaction is expected to be completed in January.