Tiffany becomes French, with all due respect to Audrey Hepburn and one of the most iconic films of the last sixty years. The American company was acquired by the world's number one luxury giant, LVMH for 16,2 billion dollars, equal to 14,7 billion euros.
The negotiations went on for months, but in the end Tiffany succumbed to the ruthless courtship of Bernard Arnault who paid $135 per share ($9,5 more than Tiffany's stock as of Friday's close), against an initial offer – presented at the end of October – equal to 120 dollars per share. A figure that represents the most expensive acquisition in the history of luxury in general and in that of LVMH in particular, beating what to date had been the most expensive purchase of the group: Dior, bought in 2017 for 13 billion dollars. The transaction will be finalized in mid-2020 and will further increase the exposure of the French giant in the jewelery sector, one of the fastest growing sectors of the entire luxury market which has now become the target of all the main groups in the sector.
It is no coincidence that the world geography of jewels and watches has undergone important changes in recent years, moving its center of gravity to southern Europe, between France and Switzerland. LVMH already owns Bulgari, acquired for 5,2 billion dollars in 2011, but also Chaumet, Tag Heuer and Hublot. Thanks to Tiffany he will now be able to officially launch the challenge to Richemont, which in turn controls brands of the caliber of Cartier, the world's number one jewelery brand, Van Cleef & Arpels, Montblanc and Buccellati. Nor should we underestimate the presence on the market of Kering, which over the years has acquired Pomellato, Boucheron, Girard-Perregaux, Ulysse Nardin.
“From a strategic point of view this acquisition makes a lot of sense, as it adds to Lvmh a strong brand in the watches and jewelery segment, doubling its size in this luxury sector from an expected $4,6 billion in 2019 and to $9,5 billions of dollars”, comment the analysts of Mediobanca Securities.
The battle to the sound of sales and turnover has therefore begun. Tiffany will bring revenues of 4,4 billion with it to Paris, a network of 320 directly managed stores and the hard work done in the last two years to conquer the Chinese market. The iconic US company, under the leadership of the Italian Alessandro Bogoglio, has managed to put the difficulties experienced from 2015 to 2017 behind it, a period in which the stock reached its all-time low on the stock market, falling to 60 dollars per share, less than half of the purchase value paid by Lvmh.
The official announcement has already brought the first reactions on the markets: in Paris Lvmh gains 2,3%, rising to 405,35 euros. In New York, in the pre-exchange stage the Tiffany title it rises by more than 6% and approaches the purchase price, reaching 133,25 dollars.
