Luxury jeweler Tiffany & Co. has agreed to a $400 million discount on the purchase price to salvage its takeover by LVMH. In a joint statement, the companies said they’d agreed to modify terms so LVMH will pay $131.50 per share rather than $135 per share as the companies originally agreed.

The deal values Tiffany at $15.8 billion, rather than $16.2 billion. Other key terms of the merger agreement remain unchanged.

In September, LVMH said it was abandoning the deal, citing ongoing trade tensions between the U.S. and European Union. The company said it was prohibited from closing the deal until January after it received a letter from the French foreign ministry. The agreement required closing in November.

In a lawsuit filed in Delaware, Tiffany said LVMH was trying to renegotiate the deal on more favorable terms or “run out the clock.” LVMH countersued citing the steep drop in Tiffany’s global revenue amid the COVID-19 pandemic. According to Bain, luxury industry revenues were expected to fall 35% this year.

LVMH chief executive officer Bernard Arnault called the modified deal “balanced” and said it would allow “LVMH to work on the Tiffany acquisition with confidence.”

“We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter,” Arnault said.

Bernstein analyst Luca Solca said the deal would bolster LVMH’s position in the watches and jewelry segment and would help it build its presence in the U.S. Resolution of the dispute sent a good message to the luxury sector as well, Solca said. “The LVMH and Tiffany saga seems to have finally come to an end,” Solca said.

The deal must still be approved by Tiffany shareholders. It is expected to close in early 2021.

John Lamparski/SOPA Images/LightRocket via Getty Images

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