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Tiffany & Co.: The LVMH Proposal
Schill, Michael J.; Saine, Caroline Case F-2012 / Published April 22, 2022 / 26 pages.
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Product Overview

This case set considers the acquisition of American jewelry icon Tiffany & Co. (Tiffany) by French luxury goods manufacturer LVMH Moët Hennessy Louis Vuitton (LVMH). While this case can effectively be taught in isolation in a traditional case format, it is designed to be taught in tandem with the B case, “LVMH: The Tiffany Acquisition” (UVA-F-2013) in a merger negotiation format where students work in small groups, taking the perspective of either the acquirer or the target to negotiate the terms of a merger. Set in 2019, the cases invite students to consider the strong revenue-generating and operational-efficiency gains that LVMH and Tiffany share by combining the two businesses. Each of the cases provides a different perspective on the deal, including variation in the pro forma financial forecasts. Through the experience, students are challenged to realize the merger gains by completing a deal in an environment of uncertainty in valuation methodology and ambiguity in negotiation strategy. The negotiation is supported by a multimedia application that facilitates student distribution of the case materials, collection of the negotiation results, and the creation of custom slides for the student debrief. The merger negotiation format is most effectively taught over two class sessions. The cases are designed to be discussed late in an introductory MBA finance course or an advanced undergraduate corporate finance class. Especially when used in the negotiation format, the cases serve as an effective capstone experience in a corporate finance curriculum.



Learning Objectives

1) To build skill in identifying and quantifying the quantitative and qualitative gains that motivate merger agreements. 2) To reinforce and build student confidence in corporate valuation tools, including discounted cash flow–based valuation and comparable multiples–based valuation associated with stand-alone and with-synergy merger valuations. 3) To illustrate the human behavioral aspects of financial transactions by showcasing that asset prices are negotiated rather than simply calculated. 4) To expose students to negotiation theory, including concepts such as “opening and walkaway prices” and the “zone of potential agreement” (ZOPA).


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  • Overview

    This case set considers the acquisition of American jewelry icon Tiffany & Co. (Tiffany) by French luxury goods manufacturer LVMH Moët Hennessy Louis Vuitton (LVMH). While this case can effectively be taught in isolation in a traditional case format, it is designed to be taught in tandem with the B case, “LVMH: The Tiffany Acquisition” (UVA-F-2013) in a merger negotiation format where students work in small groups, taking the perspective of either the acquirer or the target to negotiate the terms of a merger. Set in 2019, the cases invite students to consider the strong revenue-generating and operational-efficiency gains that LVMH and Tiffany share by combining the two businesses. Each of the cases provides a different perspective on the deal, including variation in the pro forma financial forecasts. Through the experience, students are challenged to realize the merger gains by completing a deal in an environment of uncertainty in valuation methodology and ambiguity in negotiation strategy. The negotiation is supported by a multimedia application that facilitates student distribution of the case materials, collection of the negotiation results, and the creation of custom slides for the student debrief. The merger negotiation format is most effectively taught over two class sessions. The cases are designed to be discussed late in an introductory MBA finance course or an advanced undergraduate corporate finance class. Especially when used in the negotiation format, the cases serve as an effective capstone experience in a corporate finance curriculum.

  • Learning Objectives

    Learning Objectives

    1) To build skill in identifying and quantifying the quantitative and qualitative gains that motivate merger agreements. 2) To reinforce and build student confidence in corporate valuation tools, including discounted cash flow–based valuation and comparable multiples–based valuation associated with stand-alone and with-synergy merger valuations. 3) To illustrate the human behavioral aspects of financial transactions by showcasing that asset prices are negotiated rather than simply calculated. 4) To expose students to negotiation theory, including concepts such as “opening and walkaway prices” and the “zone of potential agreement” (ZOPA).