Luxury goods company LVMH raised 9.3 billion euros on Wednesday on the bond market to finance the acquisition of US jeweller Tiffany, on particularly advantageous financial terms.
By Luxus Plus
The transaction involved two issues, one of €7.5 billion in euro-denominated bonds and the other of €1.8 billion in sterling, in seven tranches including maturities ranging from 2 to 11 years, and its overall cost amounted to 0.05%, Clémentine Tassin, Director of Treasury and Financing at LVMH, told the press.
This major bond market fund-raising operation has been in great demand from French and European institutional investors in particular, she said, with a total amount of around €27 billion, i.e. three times the amount issued. “We had emphasised that this would be the only euro transaction of significant size for the acquisition of Tiffany,” said Clémentine Tassin, which generated strong interest. “This shows both the impressive liquidity available to the financial markets, and how much this issue was expected.”
The rest of the $ 16.2 billion that the industry leader in fashion and luxury will spend to buy the American jeweler will be financed by existing cash and commercial paper, at negative rates, which could give an overall cost close to zero or even slightly negative.
The banks Natixis, Bank of America, Citibank, Crédit Agricole, Société Générale, Deutsche Bank and HSBC, coordinated the operation.
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