CollectionsFeb 21, 2025
Piece of the Week: Jade Ruzzo’s ‘Tennessee’ Oval Drop EarringsHeidi Gardner, an SNL cast member, wore the smoky quartz earrings on the “SNL50: The Anniversary Special” red carpet on Sunday.
MajorsSep 14, 2020
Tiffany-LVMH Deal May Be Saved, Say Analysts
LVMH’s acquisition of Tiffany & Co. still has a chance, albeit at a lower price.
A platinum and diamond wedding ring set from Tiffany & Co. Analysts said LVMH’s acquisition of the jeweler may still happen, if the sale price is lowered. (Photo courtesy of Tiffany & Co.)
New York—LVMH’s acquisition of Tiffany & Co. is on shaky ground after the French luxury titan announced Wednesday it would be backing out of its agreement to buy the American jeweler.
Tiffany responded with a lawsuit to force LVMH to move ahead with the deal.
In its official statement issued last week, LVMH cited closing date issues after Tiffany requested a second extension and, it said, the French government asked it to hold off until January 2021 because of proposed U.S. tariffs on French luxury goods.
Tiffany countered that LVMH was looking for a way out of the $16.2 billion deal and breached the merger agreement by dragging its feet on securing the necessary regulatory clearances.
The deal recently received regulatory approvals from the Japan Fair Trade Commission and the Mexican competition authority, according to an 8-K filing with the U.S. Securities and Exchange Commission. It is still waiting for clearances from the European Commission and the Taiwan Fair Trade Commission.
LVMH said last week it plans to file its own lawsuit in response.
It called Tiffany’s lawsuit “totally unfounded” and claimed the jeweler had prepared it “a long time ago.”
After looking over Tiffany’s first-half results, the French luxury conglomerate called its perspectives for 2020 “very disappointing and significantly inferior to those of comparable brands of the LVMH Group during this period.”
LVMH said it would be challenging in court the way Tiffany’s management handled the COVID-19 crisis, noting that the company distributed “substantial dividends” when it was losing money and that its operation and organization are not “substantially intact.”
A long legal battle is likely ahead, but analysts aren’t ready to say the deal is off just yet.
“We’re not experts in French foreign affairs but we do believe that Tiffany & Co. remains an attractive target,” wrote Needham analyst Rick Patel in a note to investors shared with National Jeweler.
RELATED CONTENT: What Tiffany’s Acquisition Means for the Jewelry Industry
The COVID-19 pandemic took a toll on Tiffany’s second-quarter results, Patel noted, but highlighted the retailer’s progress in China, digital, and its new product launches.
Those strategic areas were what LVMH was likely drawn to in the first place, he said.
However, the pandemic has led to lower retail valuations across the board, noted Patel.
The deal could go through if Tiffany is willing to lower its initial selling price of $135 per share, he said, but it’s unclear whether the jeweler is willing to do so.
Oppenheimer analyst Brian Nagel
Editors' Picks
Sponsored by
echoed that sentiment, adding that this will likely be an ongoing negotiation.
“Our best estimate is that there now exists an 80-85% chance (down from 90%-plus) for a deal to occur at or above an acquisition price of $108/share (vs. a current offer of $135/share),” he wrote.
When talk of the deal first began, Tiffany confirmed it had received a bid for $120 per share, which would have valued the company at $14.5 billion.
Tiffany reportedly requested that LVMH up its bid to $130 per share. The final deal was for $135 per share, or $16.2 billion, one of the largest transactions in LVMH’s history.
A price reduction could salvage the deal, said Guggenheim analyst Robert Drbul.
“Considering the deal was initially negotiated in November 2019 (pre-pandemic), the deal could still be finalized, albeit at a lower price,” he wrote. “We continue to believe LVMH is the optimal buyer for Tiffany & Co., and Tiffany is a logical fit within LVMH’s portfolio of brands.”
LVMH said at the time that the addition of Tiffany could strengthen its position in the jewelry market and bolster its presence in the United States.
The acquisition would also give LVMH access to Tiffany’s vertical integration capabilities.
Tiffany established Laurelton Diamonds, a wholly owned manufacturing subsidiary, in 2002. It is a
De Beers sightholder and has also inked long-term rough supply agreements with Alrosa and Dominion Diamond.
The specialty jeweler also holds a stake in a diamond mine in South Africa owned by Canadian mining company Diamcor.
Analyst Patel also took a look back to November 2019, when LVMH first announced its acquisition plans.
In the first half of 2019, Tiffany’s business had slowed and its comps in the Americas were on the decline.
“At the time, Tiffany was known to be a self-help story that was investing in product innovation, marketing, digital and store renovation. In our view, the company remains a self-help story and is making progress on its growth initiatives despite the tough environment,” he wrote.
Looking at Tiffany as a whole, Needham lists an acceleration of same-stores sales in North America, higher-than-expected margins, and a successful introduction of new products as potential upside drivers.
Its risks include a weakening in the North American market, a greater-than-expected commodity inflation and a stronger U.S. dollar, which could hurt tourism.
Needham, Oppenheimer and Guggenheim all have a Hold rating on the jeweler.
“Our best estimate is that there now exists an 80-85% chance (down from 90%-plus) for a deal to occur at or above an acquisition price of $108/share (vs. a current offer of $135/share),” he wrote.
When talk of the deal first began, Tiffany confirmed it had received a bid for $120 per share, which would have valued the company at $14.5 billion.
Tiffany reportedly requested that LVMH up its bid to $130 per share. The final deal was for $135 per share, or $16.2 billion, one of the largest transactions in LVMH’s history.
A price reduction could salvage the deal, said Guggenheim analyst Robert Drbul.
“Considering the deal was initially negotiated in November 2019 (pre-pandemic), the deal could still be finalized, albeit at a lower price,” he wrote. “We continue to believe LVMH is the optimal buyer for Tiffany & Co., and Tiffany is a logical fit within LVMH’s portfolio of brands.”
LVMH said at the time that the addition of Tiffany could strengthen its position in the jewelry market and bolster its presence in the United States.
The acquisition would also give LVMH access to Tiffany’s vertical integration capabilities.
Tiffany established Laurelton Diamonds, a wholly owned manufacturing subsidiary, in 2002. It is a
De Beers sightholder and has also inked long-term rough supply agreements with Alrosa and Dominion Diamond.
The specialty jeweler also holds a stake in a diamond mine in South Africa owned by Canadian mining company Diamcor.
Analyst Patel also took a look back to November 2019, when LVMH first announced its acquisition plans.
In the first half of 2019, Tiffany’s business had slowed and its comps in the Americas were on the decline.
“At the time, Tiffany was known to be a self-help story that was investing in product innovation, marketing, digital and store renovation. In our view, the company remains a self-help story and is making progress on its growth initiatives despite the tough environment,” he wrote.
Looking at Tiffany as a whole, Needham lists an acceleration of same-stores sales in North America, higher-than-expected margins, and a successful introduction of new products as potential upside drivers.
Its risks include a weakening in the North American market, a greater-than-expected commodity inflation and a stronger U.S. dollar, which could hurt tourism.
Needham, Oppenheimer and Guggenheim all have a Hold rating on the jeweler.
More on Majors
The Latest
SourcingFeb 21, 2025
Zambia Lifts 15% Export Duty on Gemstones, Metals The reversal comes less than two months after the Zambian government reinstated the tax in an effort to bring in more money.
SourcingFeb 20, 2025
Anglo Writes Down Value of De Beers by $2.9B As anticipated, Anglo took another impairment charge on the diamond miner and marketer, which saw revenue sink 23 percent in 2024.
Brought to you by
Get Ready for the JA New York Spring ShowThis year will feature a new MJSA Showcase and partnership with Piazza Italia.
SourcingFeb 20, 2025
Harry Winston’s Son Donates Fancy Red Diamond to the SmithsonianRonald Winston is giving the 2.33-carat “Winston Red” to the Smithsonian, 67 years after his father donated the Hope Diamond.
Weekly QuizFeb 21, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
SourcingFeb 20, 2025
GJEPC Names New Chairman, Vice ChairmanKirit Bhansali, a partner in Smital Gems and chairman of India Jewellery Park, will take on the role of chairman.
IndependentsFeb 20, 2025
IJO Elects 4 New Board MembersAlisha Cornett, Nic Faini, Eric Stevens, and Seth Shipley have joined the organization’s board of directors for a three-year term.
Brought to you by
3 Ways to Capitalize on America’s Newfound Love of Colored GemsColored stones are stepping into a jewelry spotlight typically reserved for diamonds—are you ready to sell color?
CrimeFeb 19, 2025
Brink’s to Pay $42M After Admitting to Illegally Transporting MoneyThe company has to pay the Justice Department and FinCEN for violating the Bank Secrecy Act, the U.S.’s main anti-money laundering law.
SourcingFeb 19, 2025
Diamond Mining Company CEO Steps Down Amid Sales Slump, LayoffsPetra Diamonds Ltd. CEO Richard Duffy resigned as the diamond miner reported a 30 percent drop in sales to start its fiscal year.
ColumnistsFeb 19, 2025
The Smart Lab: Maximizing Your Jewelry Brand on PinterestPinterest is a potential gold mine for jewelry brands, Emmanuel Raheb writes, provided they follow these five tips.
CollectionsFeb 19, 2025
Swarovski’s NYC Flagship Celebrates Ariana Grande CollabThe store’s facade now features the iconic swan logo and campaign images of the “Wicked” star.
Policies & IssuesFeb 18, 2025
New Customs Requirements for Diamond Imports: What We KnowBeginning in April, companies importing diamonds into the United States will have to list the country in which the diamonds were mined.
AuctionsFeb 18, 2025
A Menagerie of Fabergé Coming to Sotheby’sAround 30 whimsical Fabergé animal carvings will go up for auction at Sotheby’s Geneva in May.
SourcingFeb 18, 2025
Celine Assimon Stepping Down as CEO of De Beers JewellersAssimon will be leaving at the end of February after nearly five years with De Beers.
CollectionsFeb 18, 2025
Tabayer Debuts Its First Men’s Jewelry SelectionsDesigns from the brand’s “Oera” collection have been reimagined with modern masculinity in mind.
SourcingFeb 14, 2025
Navneet Gems Now Offering Unheated Montana SapphiresThe wholesale collection features material from the Rock Creek mine in a variety of colors.
CollectionsFeb 14, 2025
Carolyn Rafaelian Partners with ‘Long Island Medium’ StarThe “Divinely Guided” collection, created in collaboration with Theresa Caputo, features symbols that celebrate the power of connection.
CollectionsFeb 14, 2025
Piece of the Week: Lorraine West’s Diamond ‘Open Heart’ RingShow some love on Valentine’s Day with this 14-karat yellow gold ring that features pavé diamonds.
CrimeFeb 13, 2025
Macy’s Employee Foils $1.5M Jewelry Theft The employee confronted the thief, causing the suspect to flee and leave behind the suitcases full of jewelry.
SourcingFeb 13, 2025
Namibian Diamond Co. Suspends CEO, COO After Deadly Heist Namib Desert Diamonds also put its security manager on leave following last month’s robbery that left one employee dead.
Events & AwardsFeb 13, 2025
AGTA Announces Buyer’s Choice Award Winners for Spectrum, Cutting EdgeAGTA recently concluded its 2025 GemFair event in Tucson and is already gearing up for next year’s show, set for Feb. 2-6, 2026.
CollectionsFeb 13, 2025
Royal Chain Releases Its Spring 2025 CatalogMore than 400 new pieces are featured in the supplier’s latest catalog.
TrendsFeb 13, 2025
Amanda’s Style File: Hearts for Valentine’s DayThis curation celebrates love with heart-shaped jewelry of all shapes and sizes.
Policies & IssuesFeb 13, 2025
Jewelers Relief Fund Reopened to Aid Victims of LA Fires The fund is collecting money for jewelry businesses damaged by the wildfires in Los Angeles County.
TrendsFeb 12, 2025
5 Engagement Ring Trends Expected to Rule 2025From chunky bands to vintage diamond cuts and bezel settings, these are the trends experts are seeing take over the bridal market.
EditorsFeb 12, 2025
Q&A: Marion Fasel on the History of Diamond Engagement RingsFasel discusses researching her new book, the most enduring engagement ring styles, and the diamond shape Taylor Swift will pick.
