French luxury group LVMH offers to buy U.S. jeweler Tiffany - sources

By Greg Roumeliotis (Reuters) - Louis Vuitton owner LVMH has approached Tiffany & Co with a $14.5 billion acquisition offer, people familiar with the matter said, at a time when the U.S. luxury jeweler grapples with the impact of tariffs on its exports to China. LVMH, which has for years been looking for ways to expand in the U.S.

Reuters October 28, 2019 04:06:28 IST
French luxury group LVMH offers to buy U.S. jeweler Tiffany - sources

French luxury group LVMH offers to buy US jeweler Tiffany  sources

By Greg Roumeliotis

(Reuters) - Louis Vuitton owner LVMH has approached Tiffany & Co with a $14.5 billion acquisition offer, people familiar with the matter said, at a time when the U.S. luxury jeweler grapples with the impact of tariffs on its exports to China.

LVMH, which has for years been looking for ways to expand in the U.S. market, submitted a preliminary, non-binding offer to Tiffany earlier this month, one of the sources said.

LVMH's offer valued Tiffany at about $120 per share, another of the sources added. Tiffany shares ended trading on Friday at $98.55.

Tiffany has hired advisers to review LVMH's offer but has not yet responded to it, and there is no certainty that it will negotiate a deal, according to the sources.

The sources asked not to be identified because the matter is confidential. LVMH and Tiffany declined to comment. Bloomberg News reported earlier on Saturday that LVMH was holding talks with Tiffany.

LVMH, which is behind brands such as Fendi, Christian Dior and Givenchy, as well as Veuve Cliquot champagne, has stood out for several years as one of the top performers in the upscale retail sector, where not all labels are benefiting to the same degree from booming Chinese appetite for branded goods.

Tiffany, on the other hand, has not been as resilient. Beyond the tariffs that have been triggered by the trade war between the United States and China, a lower Chinese domestic sales tax has also contributed to double-digit decreases in its sales to Chinese tourists in the United States and in other destinations.

High-end brands have also long relied on Hong Kong as a major shopping hub drawing visitors from mainland China in particular, and four months of pro-democracy demonstrations are starting to take their toll.

However, earlier this month LVMH, which has a market capitalization of 194 billion euros ($215 billion), beat sales forecasts for the third quarter despite the unrest in Hong Kong. In August, Tiffany reported quarterly earnings that also beat analysts' expectations, thanks to a drop in marketing costs.

Tiffany has been refreshing its offerings with more affordable items such as pendants and earrings, to appeal to millennials who have been gravitating to lower-priced competitors such as Denmark's Pandora A/S and Signet Jewelers .

Paris-headquartered LVMH is controlled by the Arnault family and is led by Bernard Arnault, France's richest man. Based in New York and best known for its diamond engagement rings, Tiffany operates more than 300 retail stores globally.

(Reporting by Greg Roumeliotis in New York; Additional reporting by Sarah White in Paris; Editing by Marguerita Choy and Sonya Hepinstall)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.