Initially $135 per share lowered to $131.50
Bloomberg "LVMH's Tiffany Acquisition Sparks Cartier Jewelry Industry Hegemony Battle"
[Asia Economy Reporter Kwon Jae-hee] The merger and acquisition between Louis Vuitton Mo?t Hennessy (LVMH) and Tiffany & Company, which escalated into a lawsuit in the luxury industry’s 'mega deal,' has found common ground. LVMH and Tiffany have agreed to lower the acquisition price.
On the 28th (local time), the Wall Street Journal (WSJ), citing a source familiar with the matter, reported that LVMH reached a new agreement to acquire Tiffany at $131.50 per share. This is a $3.50 reduction from the originally agreed $135 per share. According to the newly agreed price per share, the total acquisition price has been lowered from the previous $16.6 billion (approximately 19 trillion KRW) to $15.775 billion (approximately 17.88 trillion KRW).
Tiffany’s board of directors is scheduled to hold a meeting on the same day to discuss the revised price, but it is uncertain whether Tiffany will accept it.
If Tiffany accepts this negotiation proposal, the lawsuit between the two companies is expected to come to an end.
Initially, the merger and acquisition between LVMH and Tiffany was noted as the largest mega deal in the luxury industry. However, when Tiffany was hit hard by the COVID-19 pandemic, LVMH showed signs of canceling the merger, citing instructions from the French government.
Last month, LVMH stated, "We have received an order from the French government to postpone the acquisition of Tiffany until after January 6 next year," adding, "At this time, we cannot complete the acquisition."
When LVMH showed signs of canceling the acquisition agreement, Tiffany filed a lawsuit in the U.S. District Court for the District of Delaware. Tiffany argued that LVMH was using the French government as an exit strategy to back out of the acquisition and countered, "The French government’s request has no legal basis."
In response, LVMH also filed a countersuit, claiming that Tiffany did not respond properly despite COVID-19, deepening the conflict.
Bloomberg analyzed that if this acquisition, the largest investment by LVMH Chairman Bernard Arnault, is completed, it could lead to a competition for dominance in the jewelry industry with Richemont, the owner of Cartier.
Meanwhile, Tiffany recorded a net profit of $262 million (approximately 154.1 billion KRW) last year but posted a net loss of $33 million (approximately 3.91 billion KRW) this year.
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