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One thing to start: Companies unleashed a wave of global takeovers on Monday, agreeing more than $70bn in deals as multinationals targeted the booming US market to squeeze out competitors and find new sources of growth, DD’s Eric Platt and Arash Massoudi report

Now to the main event . . . 

Last month luxury tycoon Bernard Arnault stood side by side with Donald Trump at a ceremony in Texas to open a new leather production facility for Louis Vuitton

Europe’s richest man and the driving force behind France’s LVMH let the US president in on a secret about an upcoming deal that would be the sector’s biggest ever. 

Arnault recalled to the FT’s Harriet Agnew on Monday: “I told the president I would buy something significant in the US, but I didn’t tell him the name.” 

Little did Trump know that only two days earlier Toni Belloni, LVMH’s group managing director, had invited Alessandro Bogliolo, chief executive of US jewellery brand Tiffany & Co for lunch at the Clocktower restaurant in the New York Edition hotel. 

The two Italians had known each other for years; Bogliolo had a senior role at Bulgari when LVMH bought the high-end jeweller in 2011. But this was no social call.

During lunch, Belloni made an unsolicited proposal on behalf of LVMH to buy Tiffany for $120 a share. He also laid out LVMH’s vision for how it planned to restore the brand’s lustre. 

Following weeks of negotiations, the two groups approved a $135 a share bid from LVMH, valuing Tiffany at $16.6bn over the weekend. 

To get an idea of what lies ahead, LVMH plans to apply the same polish to Tiffany that it used on Bulgari, which it bought for $5.2bn in 2011. Since then the high-end Italian jeweller has seen sales more than double and profits increase fivefold. 

“My goal with Tiffany — as it is for Louis Vuitton or Dior — is that desirability for the brand should be higher in 10 years’ time than it is right now,” Arnault told the FT. “Profit and growth will be a consequence of that.”

The Tiffany deal also marked a reunion of sorts for several of the Italian faces from the LVMH-Bulgari tie-up. 

LVMH’s Belloni was very involved in both negotiations. Francesco Trapani, the former chief executive at Bulgari who helped orchestrate the sale to LVMH, is now a board member at Tiffany. 

Trapani was partly behind the appointment of Bogliolo as chief executive of Tiffany two years ago. 

One of LVMH’s advisers on the Tiffany acquisition was Luigi de Vecchi, who chairs investment banking in Europe at Citigroup. He previously advised Bulgari on its sale to LVMH.

As the protagonists prepared to announce the deal to the market on Monday, all that was left for Arnault to do was call the US president and inform him of Tiffany’s new owner. And what did he make of the news? “He’s very happy,” said Arnault. 

Go deeper with our analysis and read on the deal here. Also check out Arnault’s Lunch with the FT from the summer. 

Schwab/TD: your move next, traditional brokerages

Charles Schwab delivered a double blow to the retail brokerage industry on Monday. 

The first blow was its move to cut online stock trading commissions to zero. The second and perhaps more striking is its all-stock deal with TD Ameritrade, which will create an asset management Goliath. Schwab’s competitors are undoubtedly scrambling. 

Schwab has landed itself quite the bargain in a deal that values TD’s equity at about $26bn, averaging out at $52.23 a share. It’s a somewhat difficult pill for TD shareholders to swallow given the company’s share price traded above $57 earlier this year. Especially given that Schwab is the reason why TD’s stock price has tanked.

As we told you last week before Schwab agreed a deal with TD, it announced in October that it was cutting online brokerage fees to zero. That sent TD’s share price, which is the most reliant on trading commission out of the big three brokerages, down 26 per cent on the day. Then Schwab struck. 

Schwab’s capture of TD underlines the arms race for customers who can then be sold an array of other services. The bold move has put traditional full-service brokerage groups such as Morgan Stanley and Bank of America Merrill Lynch on notice. 

As Michael Spellacy, senior managing director at the consulting firm Accenture, said: “They’re quaking in their boots right now.”

They might find some relief in the fact that Schwab chief executive Walt Bettinger could have a hard time getting regulators to approve the deal. 

Go in-depth with our analysis on the deal. Here’s what Lex had to say.


WeWork has been much maligned by profit purists for its “community-adjusted” approach to ebitda. 

Once upon a time, when the consciousness-raising co-working company still hoped to go public, the Securities and Exchange Commission wasn’t a fan, forcing it to replace the metric with something called a “contribution margin”. 

Fans of accounting obfuscation need not fear that WeWork has changed too much since SoftBank swept out co-founder Adam Neumann and spent billions of dollars to save it from financial ruin.

In a blog post slipped out after dark on Friday, WeWork disclosed that it has a new definition for ebitda which runs to no fewer than 97 words: 

Net loss before income tax (benefit) provision, interest and other (income) expense, depreciation and amortization expense, stock-based compensation expense, expense related to stock-based payments for services rendered by consultants, income or expense relating to the changes in fair value of assets and liabilities remeasured to fair value on a recurring basis, expense related to costs associated with mergers, acquisitions, divestitures and capital raising activities, legal, tax and regulatory reserves or settlements, significant non-ordinary course asset impairment charges and, to the extent applicable, any impact of discontinued operations, restructuring charges, and other gains and losses on operating assets.

DD would love to know more about which consultants have accepted payment in WeWork stock. And we can all, surely, find a silver lining here — WeWork’s candour in defining its ebitda as a net loss.

Job moves

  • Landsec, the UK’s largest listed property group by assets, has appointed Mark Allan as chief executive to replace Robert Noel, who announced his retirement earlier this year after a decade at the company.

  • Asian insurer AIA has named Ping An Insurance’s Lee Yuan Siong as its new chief executive as it eyes expansion into mainland China. More here

  • Hogan Lovells has hired Raj Panasar as a capital markets partner in the law firm’s corporate practice in London. He joins from Cleary Gottlieb

  • Nomura has hired Francesco Bertocchini as a managing director for investment banking in Italy. He joins the investment bank from UBI Banca where he was head of M&A.

  • Pinsent Masons has appointed Ian Laing, who is based in Singapore, to lead its global infrastructure team. He succeeds Richard Laudy.

  • Morgan Stanley Capital Partners has hired Jill Wight, a former principal and head of portfolio operations for Carlyle Equity Opportunity fund, as a managing director. 

Smart reads

Master of macro Louis Bacon is widely recognised as one of the most famous hedge fund managers of his time, having made some audacious bets early on in his career. His retreat from managing money marks the end of an era for many in the industry. (FT)

Paper trail Jeff David had a seemingly picture-perfect life until a former colleague from the Sacramento Kings, where he used to be chief revenue officer, uncovered a trove of documents David left behind that showed he had stolen $13m from the basketball team. Here is how he did it. (ESPN)

Not dumb money Britain’s richest man, Jim Ratcliffe, has £20bn to play with. It’s more than enough to have taken over his boyhood club, Manchester United. But the chemicals billionaire instead opted for a French football team. He reveals why in this interview with The Times. (The Times)

News round-up

Novartis agrees $9.7bn deal for US cholesterol drugmaker (FT + Lex

Activist Investor Takes Stake in CVS (WSJ)

Mitsubishi-led consortium to buy Eneco for €4.1bn (FT)

Ebay to sell StubHub to Viagogo for $4bn (FT) 

Gold consolidation resumes as Kirkland Lake approaches Detour (FT) 

Maurice Lévy prepares for daunting task in new role at WeWork (FT)

HP refuses to open its books to Xerox over $33bn buyout offer (FT)

Uefa explores move into Champions League streaming (FT)

Dell to explore sale of RSA cybersecurity unit (BBG)

Due Diligence is written by Arash Massoudi, Kaye Wiggins and Robert Smith in London, Javier Espinoza in Brussels, James Fontanella-Khan, Ortenca Aliaj, Sujeet Indap, Eric Platt, Lindsay Fortado and Mark Vandevelde in New York, Miles Kruppa in San Francisco and Don Weinland in Beijing.

Please send feedback to due.diligence@ft.com

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