A long tussle between Tiffany & Co. (NYSE:TIF) and French luxury conglomerate LVMH is nearing an end. The U.S jewelry has agreed to be acquired by the French company in a deal priced at about $131.50 a share.
LVMH-Tiffany Deal
The new deal is down from an original price that valued Tiffany at $135 a share or $16 billion. The new deal would also translate to a $425 million discount from the previous agreement. If approved, the deal will result in Tiffani becoming one of the high-end brands that also includes Dior, Givenchy, and Bulgari.
Tiffany board meets and ratifies the deal that promises to end a year-long standoff that saw a bitter war of words between the two companies. The tussle has entangled the French government as LVMH sought its intervention. A lawsuit had also been filed in the U.S against the French company.
Tiffany's acquisition would be a major coup for LVMH, which is increasingly looking for ways to expand and strengthen its prospects in the international markets. It would also be a major boost for Chairman Bernard Arnault, who has been looking for ways to counter Cartier-owner Richemont in the global jewelry market.
LVMH-Tiffany Tussle
The merger was on the brink of collapse in the aftermath of the COVID-19 pandemic that forced LVMH to go slow on the deal. The French government also played a role in slowing the deal after it asked LVMH to go slow amid a trade dispute between France and the U.S.
The merger was further cast into doubt after LVMH sued Tiffany on claims that the managers were mismanaging the business amid the pandemic. As the original deal's closing date inched closer, the two decided to come back to the negotiating table with Tiffany approaching with a conciliatory tone, thus the $131.50 a share deal.
The new deal is expected to close in January of next year and will not interfere with Tiffany’s ability to pay dividends until the deal closes.