Luxury jeweller Tiffany & Co looks set to be bought by French luxury group LVMH after the latter increased its offer to more than US$16 billion. 

Sources have told multiple international media organisations that a deal may be announced as early as today, Europen time, before stock markets there open. 

The two companies’ boards met yesterday to finalise the deal, which would be LVMH’s largest acquisition yet and substantially boost its North American business.

LVMH initially bid $14.5 billion for Tiffany in late October when it had a market valuation of $11.9 billion, but the target company’s board rejected the offer saying it undervalued the business. 

An analyst at OC&C Strategy Consultants in Hong Kong said adding an iconic American brand to its portfolio would enable the French luxury group to get closer to the heart of American luxury customers. 

“It would reinforce LVMH’s jewellery portfolio, which was relatively limited until now compared to rival luxury groups like Richemont. Acquiring Tiffany provides LVMH not only the entry into the fine jewellery segment, but also the more accessible segment, which is growing at a faster pace than fine jewellery,” he said. 

During recent years, Tiffany has achieved success in rejuvenating the brand, expanding its jewellery collections from wedding and engagement-focused jewellery to more fashionable, everyday collections to better cater to younger consumers’ increasing need of self-indulgence. 

“To satisfy consumers’ pursuit of “newness”, they shortened the cycle of new product launches. In addition, they are also one of the pioneer luxury players in embracing digital platforms by opening a pop-up store on Tmall Luxury Pavilion and engaging with consumers creatively through WeChat, among others,” said the analyst.