On Wednesday LVMH backed out of the $16 billion buyout deal to acquire Tiffany & Co that was announced last November as the biggest luxury purchase in history. Citing tariff issues and the Covid-19 pandemic luxury downturn. Tiffany filed a lawsuit against LVMH to force the buyout contract. The deal may still go thru, but at a much discounted price or Tiffany & Co may search for another buyer in a hostile economic climate.
A Statement by LVMH on Wednesday said: “it could not complete the deal with Tiffany as it stands”. LVMH only excuse was a request from the French government via a letter to delay the deal till Jan 6th 2021 to avoid U.S. tariffs on French products.
Tiffany cites in it’s lawsuit that LVMH has not produced an original copy of the letter from the French Government. Second quarter sales for LVMH fell 38% while Tiffany’s net sales fell 29%. On Thursday LVMH countersued Tiffany’s with mismanagement and violating terms of the deal.