Louis Vuitton's Parent Company Buys Tiffany for $16.2 Billion

LVMH close to buying Tiffany for more than $16.3 bln

Louis Vuitton owner LVMH to buy Tiffany for $16bn

"It is also a bet on China's economy and its consumers, whose fast-rising incomes have made them the luxury industry's most important customers".

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

Apparently, little blue boxes can come with a lot more than just a sparkling ring.

Bernard Arnault. The French businessman is chairman and chief executive of LVMH Moët Hennessy - Louis Vuitton SE, LVMH, the world's largest luxury-goods company.

LVMH finance chief Jean-Jacques Guiony told analysts that taking Tiffany off the stock market and investing in its products would help the company deliver its revival plan.

Fashion and accessories brands including Christian Dior generate the bulk of earnings at LVMH, run by France's richest man, Bernard Arnault, though growth in jewellery has shone in recent years.

Mr Arnault has coveted the business since buying the Bulgari brand in 2011 for $5.2bn.

Arnault told Reuters that LVMH would finance the purchase with debt, adding the group could now pay interest of less than 1% to issue bonds.

While LVMH is also a public company, it does not break out individual brands' results.

Tiffany's shares have traded steadily above the initial offer price since Bloomberg News first reported the talks October 26, closing at US$125.51 a share on November 22.

The transaction is approved by the boards of both companies and is expected to close in the middle of 2020 after approvals of Tiffany's shareholders and regulatory bodies.

The two companies had announced last month that they were studying the issue after LVMH made a cash bid. Its flagship store featured in the film Breakfast at Tiffany's, where Audrey Hepburn's Holly Golightly character mused "nothing very bad could happen to you".

Bogliolo has also focused on building sales in China, where it now has some 45 stores (including 10 in Hong Kong). Tiffany reports third quarter earnings on December 5.

LVMH has 75 brands, ranging from wines to cosmetics targeted for the upmarket sector.

Growth in jewellery outpaced that of other businesses such as fashion in 2018, according to consultancy Bain & Co, which forecast comparable sales in the $20 billion global jewellery market were set to grow 7% this year. Last week it raised its bid to around $130, which convinced Tiffany to open its books to LVMH, which then offered $135 to clinch the deal.

Cereda said LVMH can leverage these to target the Asian millennial market, which would mean a "rethinking of the current product mix and its US footprint, in our view".

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