The holiday blessing thatTiffany & Co. shareholders gave to sell the storied jeweler toLVMH pushes the contentious transaction closer to the finish line, giving billionaire Bernard Arnault the long-sought pathway to expand his global collection of luxury brands.
Tiffany will be dropped from the Standard & Poor’s 500 Index now that the deal has been approved, S&P Dow Jones Indices said late Wednesday in New York, with the jeweler replaced by Enphase Energy Inc. More than 99% of the votes cast at a virtual Tiffany shareholder meeting supported the deal, CNBC reported. The transaction, valued at almost $16 billion, is expected to close in early 2021.
The vote was a key step in the yearlong saga over the luxury industry’s biggest takeover. The parent of Louis Vuitton had agreed to buy the iconic jeweler before trying to back out of the deal when the coronavirus pandemic upended the retail world. That prompted a lawsuit by Tiffany and some harsh words from both sides, and the companies eventually agreed to see the deal through at a slightly reduced price.
The two companies announced in October that they’d reached an agreement, whereby LVMH would buy Tiffany for $131.50 a share, down from $135 originally promised. Tiffany shares were little changed at $131.35 Wednesday in New York and are down about 1.7% in a tumultuous year for any retailer — let alone one trying to keep a merger intact.
LVMH Clinches Tiffany at Small Discount and a Lot of Bad Blood
Tiffany had accused LVMH of having “unclean hands” when the French side initially abandoned the deal. LVMH in turn disparaged Tiffany for mismanagement of the business during the pandemic, while spending unwisely on dividends. Making matters messier still, the French government was dragged into the showdown after Arnault requested the help of Foreign Affairs Minister Jean-Yves Le Drian to extricate itself from the deal. The two companies were set to face trial at the start of next year in the U.S.
Besides the Louis Vuitton handbag and clothing brand, the LVMH conglomerate includes Loro Piana cashmere, Bulgari jewelry and Dior haute-couture, among many others.
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