Tiffany, an American-based jewellery company, is being bought by the world's biggest luxury goods company Louis Vuitton (LVMH) for 16 billion US dollars.
Tiffany & Co, founded in 1837, is known for its expensive wedding rings and necklaces.
The billion-dollar business deal is set to give LVMH a bigger share of the United States of America market, The New York Times reports.
The deal was announced by Bernard Arnault, LVMH's chairman and chief executive.
“We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewelry world, to the LVMH family,” Mr Arnault said.
“We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come, " he added as quoted by the Guardian.
LVMH boasts of a number of brands including Dior, Givenchy, Fendi, Dom Pérignon and Bulgari.
The acquisition now grows LVMH's portfolio into jewelry beyond the soft luxury goods that it has long been known for.
This is not the company's first acquisition as it picked brands like Belmond hospitality and Rimowa luggage.
BBC reports that Tiffany shareholders are expected to give approval to the deal which will be closed in the middle of next year.
LVMH has been keen on extending its footprint in China, where they intend to take advantage of the growing spending power of the Chinese.