LVMH stock price hits record highs after completing Tiffany’s takeover

Written by: Michael Harris
January 8, 2021
  • The luxury fashion group said it completed the takeover of Tiffany’s for $15.8 billion
  • Anthony Ledru, a top executive at Louis Vuitton is set to become the new chief executive of Tiffany
  • LVMH stock price soared to record highs today to add to yesterday's gains of 2.6% after completing takeover

Shares of LVMH (EPA: MC) soared 2.6% yesterday after the luxury fashion group said it completed the takeover of Tiffany’s for $15.8 billion.

Fundamental analysis: Top executive to head Tiffany’s

LVMH said it appointed two senior Louis Vuitton executives as new directors of Tiffany and revamped the jewellery company’s design team after acquiring it for $15.8 billion.

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Anthony Ledru, a top executive at Louis Vuitton is set to become the new chief executive of Tiffany, LVMH said. 

Moreover, Alexandre Arnault, son of LVMH’s CEO Bernard Arnault, will be taking over as Tiffany’s executive vice president and boss of product and communication, while Louis Vuitton’s CEO Michel Burke will also step up as the chairman at Tiffany.

The deal almost fell apart after LVMH decided to pull back amid the coronavirus pandemic which battered its luxury goods sales. However, the two companies restarted negotiations and reduced the deal price by $425 million.

Once the integration of Tiffany is complete, LVMH is expected to grow its product ranges and focus on targeting younger clients as well as expand in Asia. The French conglomerate is also expected to review Tiffany’s entire network including stores and current strategies used for online sales. 

LVMH is also making changes in Tiffany’s design team, announcing the departure of art director Reed Krakoff and chief brand officer Daniella Vitale, whose replacements are still unknown,

“We are optimistic about Tiffany’s ability to accelerate its growth,” LVMH’s CEO Bernard Arnault said.

The acquisition of Tiffany is expected to help LVMH expand into the jewellery sector, one of the fastest-growing areas of the luxury goods industry.

The acquisition of Bulgari for 3.7 billion euros in 2011 represented a turning point for LVMH’s expansion into the jewellery market. Other brands in LVMH’s watches and jewellery division include Tag Heuer, Chaumet, Fred, Hublot and Zenith.

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Technical analysis: Shares soar to record highs

LVMH stock price soared to record highs today to add to yesterday’s gains of 2.6% after completing Tiffany’s takeover. Shares of the company rose almost 30% in November and December to exceed the EUR500.00 mark for the first time ever. 

LVMH weekly chart (TradingView)

Technically, the price action is now heading towards the next resistance line at EUR536.00, where the 161.8% extension is located. On the downside, the zone around 480.00 is likely to provide nearby support. 

Summary

LVMH closed its $15.8 billion acquisition of jewellery company Tiffany and appointed Louis Vuitton’s top executives as Tiffany’s new managers.