The French luxury giant will buy the US jeweller for US$131.5 per share, instead of the US$135 originally agreed last November, setting the final price to US$15.8bn.
It is a discount of US$425mln for the company, which decided to walk out of the deal last month in the light of the COVID-19 pandemic, citing a request from France’s Foreign Affairs Ministry to delay the deal due to a US plan to impose tariffs on French and European goods.
Tiffany’s then sued the divorcee in a US court, demanding to conclude the deal, with the case scheduled for hearing in January.
But the Bulgari and Louis Vuitton owner may have settled for a lower acquisition price to avoid costly court fees, Reuters reported.
Analysts at Hargreaves Lansdown noted that the price, despite the relatively modest discount, is “still be a lot to pay if LVMH’s prior assessment of Tiffany’s ‘dire’ prospects were correct and so far there has been a pretty muted response from shareholders.”
“Although LVMH still has an unrivalled wardrobe of brands and a loyal customer base, the collapse of the international travel market continues to depress sales and with any benefit of the Tiffany acquisition uncertain for now, the group is still in a state of flux.”