Luxury conglomerate LVMH Moët Hennessy Louis Vuitton and renowned diamond jeweller Tiffany & Co have entered into a definitive agreement where LVMH will acquire Tiffany for US$16.2 billion.

The sale translates to US$135 per share in cash. 

According to LVMH, acquiring Tiffany will strengthen the group’s position in the jewellery sector and bolster its presence in the US. Its addition to LVMH’s jewellery portfolio is also seen to transform the Watches & Jewelry division and complement LVMH’s 75 luxury houses.

Bernard Arnault, chairman and CEO of LVMH, commented, “We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewellery 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.”

Roger N. Farah, chairman of the board of directors of Tiffany, remarked, “Following a strategic review that included a thoughtful internal process and expert external advice, the board has concluded that this transaction with LVMH provides an exciting path forward with a group that appreciates and will invest in Tiffany’s unique assets and strong human capital, while delivering a compelling price with value certainty to our shareholders.”

Alessandro Bogliolo, CEO of Tiffany, said, “Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth. This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming the next generation luxury jeweller. As part of the LVMH group, Tiffany will reach new heights, capitalizing on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values.”

The transaction is expected to close in the middle of 2020 and is subject to customary closing conditions, including approval from Tiffany’s shareholders and the receipt of regulatory approvals, LVMH said.

OC&C Strategy Consultants earlier commented that LVMH’s purchase of Tiffany bodes well for the conglomerate. “Tiffany is an American icon, therefore adding Tiffany to the LVMH portfolio would enable the French luxury group to get closer to the heart of American luxury customers,” it noted.