LVMH confirms deal to acquire Tiffany for $16.2 billion in its largest acquisition ever

PARIS: LVMH, which is the world's largest luxury conglomerate entered into an agreement to buy Tiffany & Co. for more than $ 16.2 billion or $ 135 a share in cash. This deal is the largest luxury-goods deal ever, which will allow the company to gain more access to United States’ luxury consumers as well as raising the French conglomerate’s profile in jewelry. The boards of both the companies, LVMH and Tiffany confirmed the deal and the transaction is estimated to be closed in the middle of 2020.

LVMH stated that, “the acquisition of Tiffany will strengthen LVMH’s position in jewelry and further increase its presence in the United States.” LVMH further added “transform LVMH’s Watches & Jewelry division and complement LVMH’s 75 distinguished Houses.”

LVMH’s CEO said that “We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewelry world, to the LVMH family," We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come." He added.

According to TechSci Research, the partnership with Tiffany & Co. is LVMH's largest acquisition ever. Louis Vuitton, Christian Dior, and Hennessy are the brands that are already owned by LVMH company. This acquisition will enhance the exposure of LVMH in the markets of United States and Asia as majority of Tiffany's sales are done in the Canada, US, and other North American countries and other one-third of its revenue comes from Asia. Additionally, this move will allow LVMH’s company to become a bigger player in fine jewelry. Furthermore, Tiffany is recognized as one of the top jewelry brands, which would help LVMH company to reach a wider audience and expand their geographic reach.

According to the report published by TechSci Research, “UAE Gems and Jewelry Market, By Type (Gold, Diamond in Gold, Gemstone, Diamond, Silver and Others), By Distribution Channel (Exclusive Showroom, Multi-Branded Jewelry Showroom, Online), By Organised Vs Unorganised Sector, By Region (Dubai, Abu Dhabi, Sharjah and Others), Competition, Forecast & Opportunities, 2024”, the UAE gems and jewelry market stood at $ 8.4 billion in 2018 and is projected to grow at a CAGR of around 8%, to cross $ 13 billion by 2024. The market growth is expected to be driven by rising disposable income, changing consumer lifestyle, growing e-commerce and organized retail channels, coupled with innovative and premium product launches by leading jewelry players in the UAE.

According to another report published by TechSci Research, “Global Gems & Jewelry Market, By Type (Diamond in Gold, Silver, Platinum, Gold, etc.), By Region (North America, Europe, Asia-Pacific, Middle East & Africa and South America), Competition Forecast & Opportunities, 2012-2022,” the global gems & jewelry market is projected to cross USD443 billion by 2022, on account of booming tourism industry, establishment of a large number of exclusive showrooms by leading players, and rising online availability of gems & jewelry. Demand for gems & jewelry across the globe is dominated by Asia-Pacific and North America. Asia-Pacific is also emerging as the fastest growing market for gems & jewelry across the globe, on account of high demand from India, China, Vietnam, Thailand, Japan and Indonesia. High demand for gems & jewelry in the region can also be attributed to rising disposable income, and aggressive marketing and promotional strategies by leading players.