Woman's hands holding engagement ring

Tiffany and LVMH Make Amends



A Quick Review

Iconic jewelry brand Tiffany & Co. (TIF) and French luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton SE (LVMUY) have reached an agreement after weeks of tense negotiations. LVMH will buy Tiffany for a slightly lower price than the companies agreed upon previously.

Before the pandemic, LVMH had been working on a deal to acquire Tiffany, but last month the French company tried to back out of the deal, citing trade disputes between the US and the EU as the reason for the change of plans. Tiffany then sued LVMH, saying it had no legal grounds to walk away from the deal. Then LVMH countersued Tiffany, emphasizing that the pandemic had caused “devastating and lasting” effects on Tiffany’s business.

Looking at Both Perspectives

The companies have reached a new deal and an acquisition is expected to close in early 2021. LVMH will now pay $131.50 per share of Tiffany, down from the original price of $135 per share. This values Tiffany at $15.8 billion—$400 million less than the first price of $16.2 billion.

Tiffany’s board likely feels that the company being acquired at a discount is a better option than the deal falling through. For LVMH, this is still a costly purchase at a time when the future of jewelry and other luxury goods is uncertain. Analysts expect that Tiffany’s earnings will not get back to 2019 levels until 2023. However, Tiffany’s sales have recovered somewhat over the summer. Additionally, by going through with the deal, LVMH avoids the risk of losing a legal battle and avoids potential damage to its reputation.

Unique Challenges for the Luxury Goods Industry

The pandemic has put the luxury goods industry in a particularly difficult position. High-end clothing and jewelry brands depend heavily on in-person shopping and tourism, both of which have been hampered by the pandemic. Analysts at Bain predict that global luxury goods sales will decline by 20% to 35% in 2020.

Though the dispute between LVMH and Tiffany has been high-profile, many other retail companies, like L Brands (LB), the parent company of Victoria’s Secret, have also been caught in disputes over mergers recently. Investors will be eager to see if LVMH and Tiffany’s decisions will help the brands weather this difficult, uncertain period.


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS103001


All your finances.
All in one app.

App Store rating

Download on the App Store Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.


TLS 1.2 Encrypted
Equal Housing Lender