Still from 1961 Audrey Hepburn film Breakfast at Tiffany's
The world's biggest luxury goods company is buying US-based jeweller Tiffany & Co for more than $16bn.
The largest luxury goods deal to date gives LVMH's billionaire owner Bernard Arnault a bigger slice of one of the fastest growing upmarket sectors.
He said Tiffany had an "unparalleled heritage" and fitted with his other brands.
Tiffany has been hit by lower spending by tourists and a strong US dollar.
Tiffany is something of a New York institution and its flagship store is next to Trump Tower on 5th Avenue. The company hit global fame after being featured in the 1961 Audrey Hepburn film Breakfast at Tiffany's.
Founded in 1837, it employs more than 14,000 people and operates about 300 stores.
Mr Arnault has coveted the business since buying the Bulgari brand in 2011 for $5.2bn.
LVMH has 75 brands, 156,000 employees and a network of more than 4,590 stores. Its other brands include Kenzo, Tag Heuer, Dom Pérignon, Moet & Chandon, and Christian Dior.
Known for its signature robin's-egg blue packaging, Tiffany rebuffed LVMH's initial advance made just five weeks ago, arguing it significantly undervalued the company.
robin's-egg blue: 淡绿蓝色
The new deal values each Tiffany share at $135 in cash and is higher than the initial offer of $120 a share - which valued the business at $14.5bn.
The brand is associated with diamond rings but it has lost its appeal in recent years, according to Fiona Cincotta, market analyst at City Index.
She told the BBC's Today programme that there had been a "changing of the times".
"It's not quite keeping up with millennials so it just needs a re-boost and a re-brand," she said.
LVMH has experience of revitalising businesses. Ms Cincotta cited jeweller Bulgari, which when LVMH took it over in 2011 had operating margins of 8%. These have now widened to 25% on double the sales.
Tiffany has attempted to broaden its appeal to younger customers.
Last year, actor Elle Fanning was named as the face of the brand and fronted an advertising campaign to the strains of Moon River - the theme tune to the film Breakfast at Tiffany's - but remixed and featuring the rapper A$AP Ferg.
It also secured Kendall Jenner, one of the biggest "influencers" on Instagram with 119 million followers, as one of the models for this year's spring and summer collection.