The Louis Vuitton-Bulgari deal and the successful acquisition of Bulgari by Louis Vuitton has generated a lot of speculation on the merger & acquisition front. Everyone is trying to guess which one is going to be the next major acquisition. After Bulgari becoming a part of the LVMH portfolio, Tiffany has become a logical target for PPR or Richemont. This would be another massive M&A deal if it happens. But there is no likelihood of it happening in the immediate future as the whole process, even if it moves forward, will take time.
The bankers with long experience will tell you that two big deals have never happened in a row. We are most likely to see relatively small buyouts and takeovers involving transactions of less than 500 million Euros. The luxury market is growing rapidly with the support of emerging markets. Companies attempting to expand quickly will be on the lookout for possible acquisitions if the valuations are attractive and the profile of the brand fits their long term plans.
Analysts and bankers believe that of the remaining listed luxury firms Burberry, Tiffany and Tod’s are the most attractive targets for possible acquisition. They expect the US jeweler to be the first to face a takeover bid from one of the large luxury houses. But with a market capitalization of over $8 billion, it is not going to happen in a hurry. PPR had followed Tiffany closely but could not organize the finance. Richemont is more likely to pull off a deal of this size as they have the financial muscle and can expand Tiffany through their network