By Agence France-Presse
The shareholders of US jewelry company Tiffany gave the green light Tuesday for its acquisition by luxury behemoth LVHM for a sum of $16.2 billion, setting the French firm up to become a power player in fine gems at a time that demand is soaring.
The deal comes after a long wooing campaign by LVMH, already the world's top luxury firm overall, for one of the world's most famous jewelry houses, known for wedding rings and diamonds.
(AFP Photo/ERIC PIERMONT / MANILA BULLETIN)
In a statement, LVMH announced that "stockholders of Tiffany & Co have voted overwhelmingly to approve the previously announced merger agreement relating to the proposed acquisition of Tiffany by LVMH."
According to an agreement announced in November, LVMH will pay $135 per share in cash, "in a transaction with an equity value of approximately 14.7 billion euros or $16.2 billion," it said.
"This approval is a significant milestone as we move closer to completing our acquisition of Tiffany, an iconic company with a rich heritage and unique positioning in the global luxury jewelry market," added billionaire Bernard Arnault, the CEO of LVMH.
"A globally recognized symbol of love, Tiffany will be an outstanding addition to our unique portfolio of luxury brands. We look forward to welcoming Tiffany into the LVMH family and helping the brand reach new heights as an LVMH Maison."
The company said the transaction was expected to close mid-2020 subject to regulatory approvals.
Tiffany, founded in 1837 and headquartered on Fifth Avenue in New York, has long symbolized American sophistication, most memorably in the 1961 film "Breakfast at Tiffany's" starring Audrey Hepburn, based on the Truman Capote novella.
Largest luxury group
But even though its trademark Blue Boxes have often heralded tears of joy, analysts say it has struggled to refresh its image and attract a younger clientele. The deal adds Tiffany to LVMH's extensive stable of luxury brands that include Louis Vuitton, Dior, and Moet & Chandon, and will strengthen its position in the United States.
It also lets LVMH tap into a different type of luxury demand, from clients who view their purchase as more of an investment than an impulse buy.
Tiffany had been lagging behind its rivals in terms of sales growth in recent years and is expected to benefit from LVMH's extensive global network and promotional power.
The addition of Tiffany to LVMH's jewelry holdings, which already include Bulgari, Chaumet, Tag Heuer and Hublot, vaults it past Swiss-based Richemont, which holds Cartier among other brands.
LVMH began its public courting of Tiffany on October 15 with an offer of $120 per share. In November, it raised its bid to about $130, which convinced Tiffany to open its books to LVMH, which then offered $135 to clinch the deal.
LVMH is the world's largest luxury group, posting record sales of 46.8 billion euros in 2018, for a net profit of seven billion euros.
Read more: France’s LVMH secures deal to buy Tiffany for $16.2 billion