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Tiffany and LVMH kiss and make up, historic jewelry deal back on at lower price

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(Kitco News) - The jewelry luxury good markets’ biggest deal in history is back on as famed Tiffany has agreed to a lower buy out.

According to reports Thursday, French luxury goods giant LVMH is now expected to pay $131.50 for each Tiffany share, valuing the new deal at $15.8 billion, down from the $16.2 billion that was first offered earlier this year.

"We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany," LVMH CEO Bernard Arnault said in a prepared statement Thursday.

The two companies have been caught in an acrimonious dispute since September after LVMH, which owns Louis Vuitton, said it was walking away from the deal. According to reports, LVMH was asked by the French government to put the deal on hold because of an ongoing trade dispute between Europe and the U.S.

According to the reports, the deal has been approved by both boards and is expected to close early next year.

The updated deal comes as the jewelry sector struggles after the global economy collapsed due to the COVID-19 pandemic and surging gold and silver prices.

Thursday, the World Gold Council said in its third-quarter demand trends report that global gold Jewelry demand dropped 29%, down from the third quarter of 2019. So far this year, jewelry demand has totaled 904 tonnes.

"This is 30% weaker than the equivalent period of 2009 – the next lowest Q1-Q3 total and the time of the Global Financial Crisis," the analysts at the WGC said.

Looking at essential markets for the two companies, the U.S. jewelry market saw a 3% decline in the third quarter. Meanwhile, European demand fell by 17%.  

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