The Strategist

LVMH refuses to buy Tiffany

09/10/2020 - 03:03

French luxury goods maker LVMH Moet Hennessy Louis Vuitton SE will not be able to complete the purchase of American Tiffany & Co in accordance with the agreement concluded in November 2019, the French company said in a press release.

LVMH's board of directors considered an appeal from the French Foreign Ministry, which asked the company to postpone the completion of the purchase until 2021 due to the threat of imposing duties on French goods in the United States.

In support of its decision, LVMH also cites Tiffany's request to postpone the closing deadline to December 31.

"Under the current circumstances, the LVMH group will not be able to complete the purchase of Tiffany & Co.," the statement said.

Previously, companies have already postponed the deadline for three months - until November 24. Under the terms of the agreement signed by the companies in November 2019, LVMH planned to pay $ 16.2 billion for Tiffany.

Tiffany, in turn, said on Wednesday that it has filed a lawsuit against LVMH in Delaware. The American company believes that LVMH cannot withdraw from the deal, claiming a violation of its terms by Tiffany or referring to "patriotic obligations."

Tiffany’s shares fell 8.7% in pre-trading in New York on Wednesday. LVMH papers in Paris lost 1%.