Please ensure Javascript is enabled for purposes of website accessibility

Tiffany & Co. Shareholders Officially Agree to Let LVMH Take Over

By James Brumley - Feb 4, 2020 at 2:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After another lackluster year, the high-end jeweler's investors vote to join forces with a proven player.

As was largely expected, shareholders of luxury brand Tiffany & Co. (TIF) agreed to an amicable acquisition of the company by bigger rival LVMH (LVMHF 1.00%) (LVMUY 1.33%), which owns high-end brands like fashion label Louis Vuitton, Dior perfumes, Moet & Chandon wines, and others. The addition of Tiffany to the LVMH family will primarily bolster its jewelry business, though Tiffany & Co. also offers accessories, perfumes, and some items for the home.

Photograph of rings in a jewelry store case.

Image Source: Getty Images.

News of a potential deal surfaced in October of last year, when LVMH confirmed it was in negotiations with Tiffany. LVMH announced an official offer in November, valuing Tiffany & Co. at $16.2 billion, or around $135 per share. A small number of Tiffany investors sought to block the acquisition, claiming documents filed with the SEC in mid-December didn't include adequate information about the merger, including financial projections. Most shareholders are seemingly unconcerned about that paperwork, however, with LVMH reporting on Tuesday that Tiffany shareholders "voted overwhelmingly to approve" the union.

The buyout could reasonably be regarded as a graceful exit from a difficult situation. Though the Tiffany name is still well-respected, that cachet has not translated into meaningful sales or earnings growth. Aside from the impact of a tariff war that has crimped tourism to locations where many Tiffany & Co. stores are located, younger consumers are increasingly disinterested in luxury goods just for the sake of luxury. Last year's top line of $4.44 billion matched 2018's total sales. That's in contrast with LVMH, which broke its own record again last year by driving revenue of $60 billion, up 15% year over year.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tiffany & Co. Stock Quote
Tiffany & Co.
LVMH Moët Hennessy - Louis Vuitton, Société Européenne Stock Quote
LVMH Moët Hennessy - Louis Vuitton, Société Européenne
$119.21 (1.33%) $1.57
LVMH Moët Hennessy - Louis Vuitton, Société Européenne Stock Quote
LVMH Moët Hennessy - Louis Vuitton, Société Européenne
$593.00 (1.00%) $5.85

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.