Daily Management Review

Louis Vuitton ponders buying Tiffany


French group LVMH took interest in the American jewelry company Tiffany, and is already negotiating with its owners, according to sources from Bloomberg and FT. Although the parties have not signed any documents yet, the acquisition may be the largest for LVMH, which already owns brands such as Louis Vuitton, Dior and Givenchy.

public domain pictures
public domain pictures
LVMH sees in Tiffany & Co the opportunity to expand its presence in the United States and gain an advantage in the competition in the jewelry market, Bloomberg's interlocutors say. The French company is in talks with Tiffany, but so far there is no guarantee that an agreement will be concluded, sources said. The interlocutor of the Financial Times added that the deal could even fail due to the leak of information on the negotiations.

Representatives of Tiffany declined to comment. LVMH refused to answer Bloomberg and did not respond to the Financial Times.

The cost of Tiffany is now estimated at $ 12 billion, LVMH - at $ 215 billion, according to Bloomberg. If the deal takes place, it will be the largest for LVMH and potentially one of the largest for European companies this year, the agency said. This will allow the French holding to diversify its assets. Now it receives a significant income from the demand for luxury goods in China. However, the business is threatened by a trade war between the US and China, as well as protests in Hong Kong, Bloomberg believes. The USA is the second largest market for LVMH, and the company wants to strengthen its presence in it, the agency adds.

LVMH now owns the jewelry brand Bulgari, and the company cannot dominate in this market, since it has a serious rival - the Swiss Richemont SA, which owns Cartier and Van Cleef & Arpels. The jewelry line of LVMH shows slow growth compared to other divisions of the company. Tiffany shares rose 22% this year. At the same time, the position of the company is now uncertain: business is hindered by the decline in interest in its products among tourists, a stronger dollar and a trade war, FT notes.

source: bloomberg.com, ft.com