Analysis on the Impact of the Acquisition of LVMH and Tiffany & Co

Abstract

On the 7 th of January 2021, a famous acquisition deal in the luxury industry was completed, the acquisition of LVMH-Tiffany & Co., which turned out to be the largest acquisition deal in history. What are some of the insights behind this deal? What kind of impacts this deal will have on the luxury industry? Is this deal going to have any positive or negative impacts on LVMH or Tiffany's jewellery and watches division? This paper provides an overall analysis of the acquisition deal and specifically focuses on the financial performance of LVMH after the acquisition, the motivation behind this deal, and the impacts on the future of LVMH and Tiffany & Co.'s jewellery and watches business. After a set of measurements, it is clear that Tiffany has contributed to the watches and jewellery sector of LVMH's portfolio largely by increasing the revenue percentage of the product segment. There are several motivations behind the deal including but not limited to marketing strategy, diversity of the business portfolio, and competing with competitors by acquiring a strong brand in the luxury fields. However, having the access to high-end jewellery business and the American market is the main goal that LVMH was trying to achieve. Indeed, Tiffany & Co. has been profitable and known for its brand name, however, there are some possibilities that LVMH will build a watchhouse with Tiffany's name and other brands.