France’s LVMH will pay slightly less to acquire US jeweller Tiffany & Co after the two companies agreed to end a bitter dispute triggered by the Covid-19 pandemic and salvage the luxury sector’s biggest-ever deal.

The new takeover price was set at $131.5 a share, down from $135 in the original deal, the companies said in a statement on Thursday, bringing the total price tag to about $15.8 billion.

That represents an overall discount of $425 million for LVMH, which is led by billionaire businessman Bernard Arnault, a consummate dealmaker who is betting the French giant can restore Tiffany’s lustre by investing in stores and new collections.

“We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter,” Arnault said in the statement.

Other key terms of the deal, initially agreed last November, remain unchanged, the companies added.

The transaction, which has received regulatory clearance, is expected to close in early 2021, subject to Tiffany shareholder approval. Under the revised deal, Tiffany will pay its regular quarterly dividend of $0.58 per share on November 19.

“Tiffany and LVMH have also agreed to settle their pending litigation in the Delaware Chancery Court,” the statement from the companies said.

War of words

The new deal, whose main details emerged on Wednesday, brings to an end an acrimonious and public war of words between two of the luxury industry’s best known groups.
The initial deal ran into trouble last month when Louis Vuitton owner LVMH said it could no longer complete the transaction by a November 24 deadline.

It cited a French political intervention asking it to delay completing the acquisition until January 6 because of a threat of new US tariffs on French products, and also decried the jeweller’s “dismal” performance during the coronavirus crisis.

Tiffany in return sued LVMH in a Delaware court, seeking to force it to honour the original deal. The case had been scheduled to be heard in early January.
However, a source close to the matter told Reuters on Wednesday that Tiffany had recently approached LVMH with a more conciliatory tone.