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Report: LVMH agrees to buy Tiffany & Co. for $18.5 billion

Tiffany & Co. boxes.
Photo: Nicolas Economou/NurPhoto via Getty Images

France's LVMH has agreed to buy U.S. luxury jeweler Tiffany & Co. for around $18.5 billion, or $135 per share, according to CNBC's David Faber.

Why it matters: This deal is largely about trade war opportunism, as Tiffany has been hammered by decreased Chinese tourism to the U.S. It's tried to offset that by opening more stores within China, but it's been hampered there by new Chinese tariffs on U.S.-made jewelry.

The bottom line: The $135 per share price is a massive premium to where Tiffany was trading last month before LVMH publicly acknowledged its takeover interest, and even an 8% bump from where Tiffany shares closed on Friday.

  • Early expectations were that the takeover price would be closer to $120 per share.
  • It gives Tiffany an equity value of around $16.3 billion, while LVMH also would assume around $2.5 billion of existing tiffany debt.
  • Faber reports that Tiffany's board is expected to vote on the deal later today.