LVMH Squashes Deal With Tiffany
Luxury brand giant LVMH announced that it was canceling its $16.2 billion acquisition of Tiffany, according to CNBC.
The deal would have been the biggest-ever in the luxury industry. The contract signed in November 2019 requires a closing date of Nov. 20, 2020. However, the French minister of foreign affairs has stated that the company should defer the deal until after Jan. 6, 2021. There is a significant risk as the US threatens taxation on French goods. LVMH said in a statement that it will not be able to acquire Tiffany "as it stands."
The luxury brand company wants to assess the impact of potential US tariffs on French goods. Tiffany shares fell 9 percent following the news. Tiffany has filed a lawsuit in Delaware state to enforce the agreement, stating that the French minister has no authority.
The pandemic has decimated the retail industry and brought into question whether LVMH overpaid for Tiffany. Analysts expected the deal to go through, but possibly at a lower price.
This deal will most likely be decided by the court.