November 25, 2019 / 10:30 AM / 8 months ago

LVMH swoop on Tiffany will boost operating profits: Chairman

FILE PHOTO: Bernard Arnault, Chief Executive Officer of LVMH Moet Hennessy Louis Vuitton SE, attends the company's shareholders meeting in Paris, France, April 18, 2019. REUTERS/Benoit Tessier

PARIS (Reuters) - Acquiring Tiffany will lift LVMH’s operating profits by 500 million to 600 million euros ($661.32 million) in the first 12 months, the luxury goods group’s Chairman and Chief Executive Bernard Arnault said on Monday.

The $16.2 billion deal is expected to close mid next year, the companies said earlier.

Arnault told Reuters that LVMH would finance the purchase with debt, adding the group could currently pay interest of less than 1% to issue bonds.

LVMH would follow a similar pattern to its 2011 acquisition of Bulgari by investing in communication, stores and new products at Tiffany, Arnault said. He added that a management shake-up was not on the cards for now.

“It’s a little early to decide on that, we have an excellent relationship with them,” Arnault said.

Reporting by Sarah White; editing by Richard Lough

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