LVMH and Tiffany & Co. have reportedly come to an agreement to lower the price of their acquisition deal, potentially bringing an end to their ongoing legal dispute. According to insiders, the revised deal would see the price decrease from $135 per share to $131.5 per share, resulting in a discount of $425 million for LVMH. An official announcement about the progress of the deal is expected to be made on Thursday. However, the revised deal still requires approval from Tiffany shareholders, although the company believes this will be a straightforward process. In addition, there will be no restrictions on Tiffany’s ability to pay dividends until the deal is finalized.

The original acquisition deal faced complications when LVMH stated that it would not be able to complete the transaction by the November 24 deadline. LVMH cited a political intervention and Tiffany’s poor performance during the pandemic as reasons for their inability to proceed. This led to a legal battle between the two companies, with Tiffany seeking to enforce the original deal. The case is set to be heard in early January.

After weeks of contentious exchanges between LVMH and Tiffany, reports of a revised deal have now emerged. Some industry analysts have expressed confusion over LVMH’s efforts to negotiate such a small discount, considering the extensive efforts made to secure it. However, they do recognize that the strategic rationale behind the deal remains strong, with Tiffany being viewed as a perfect fit for LVMH.

The acquisition of Tiffany represents LVMH’s largest yet, showcasing their confidence in their ability to revitalize the renowned American jeweler through investments in both stores and new collections. The deal aimed to bolster LVMH’s presence in the rapidly expanding jewelry and watch industry segment, while also strengthening their position in the US market. Tiffany, known for its iconic blue boxes and status as a top provider of engagement rings, continues to hold a highly coveted position in the industry.

Useful links:
1. Reuters: LVMH and Tiffany agree to reduced acquisition price
2. Forbes: Tiffany reduces price on LVMH acquisition, $425 million discount to be finalized