French billionaire's luxury group LVMH to buy Tiffany for US$16.2 billion

The iconic 182-year-old New York jeweller Tiffany employs 14,000 people and operates 300 stores around the world

LVMH, which owns 75 prestigious brands including Christian Dior and Givenchy and has 4,590 stores worldwide, confirmed in a statement that it has agreed to buy the jeweller for $135 (£105) per share in cash.

Arnault released a statement following the Tiffany deal, "We have an enormous 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 [brand houses]". Acquiring Tiffany would more than double LVMH's jewellery scale and boost its market share to more than 18%, according to Bloomberg Intelligence analyst Deborah Aitken.

Tiffany is something of a NY institution and its flagship store is next to Trump Tower on 5th Avenue.

Founded in NY in 1837 and known for its signature robin's egg blue packaging, the brand is one of the best-known names in the sector, but has struggled to win over younger shoppers in recent years.

Arnault, Europe's richest man who is the chairman and chief executive of LVMH, said: "We have an vast 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".

The acquisition of Tiffany will boost LVMH's position in the jewelry market and strengthen its presence in the US, the French company said.

Such a deal has been seen as the way ahead for Tiffany, which has trailed rivals in terms of sales growth in recent years.

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Yet even with that spree, LVMH has lagged behind Richemont in luxury jewellery, a significant area of growth in emerging markets such as China.

He said Tiffany had an "unparalleled heritage" and fitted with its other brands, Louis Vuitton and Bulgari.

LVMH shares were up 1.1 per cent in afternoon trading at 400.75 euros, and have climbed since the group first announced a bid for Tiffany, reaching a record high of 407.85 euros earlier this month.

Tiffany's shares closed trading on Friday at $125.51.

The deal has been approved by the boards of directors of both companies and "the Tiffany Board of Directors recommends that Tiffany shareholders approve the transaction with LVMH".

The deal is expected to close in the middle of 2020 following approval by Tiffany's shareholders and regulators.

Tiffany had sales of US$4.4b in 2018, an increase of almost 7 per cent over 2017.

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