The world’s biggest luxury goods company LVMH is set to buy US-based jeweller Tiffany & Co in a deal worth in excess of $16bn (£12.5bn).

A deal has been struck overnight and would give Bernard Arnault, owner of LVMH, an even bigger share of one of the fast-growing sectors in luxury fashion, the BBC reported.

Arnault said Tiffany  & Co had “unparalleled heritage” and fitted in with other brands in the wider LVMH group such as Louis Vuitton, Bulgari and Moët & Chandon.

The luxury jeweller has suffered falling sales of late and been hit by lower spending tourists and the comparative strength of the US dollar.

Despite this, Arnault has coveted the business since buying Bulgari in 2011, and the $16.2bn deal would represent the biggest ever for LVMH.

“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 [brand houses],” he said.

LVMH’s initial approach for Tiffany was rebuffed, but the jeweller’s chair Roger Farrah described the deal as “an exciting path forward with a group that appreciates and will invest in Tiffany’s unique assets and strong human capital”.

LVMH owns 75 brands, employs over 155,000 staff and has a global network of more than 4,590 stores.