Two major luxury goods companies are at war in a row over a stalled multibillion-dollar deal.
US jeweller Tiffany has filed a lawsuit against VMH Moet Hennessy Louis Vuitton (LVMH) after the French conglomerate pulled out of a $16bn (£12.3bn) takeover. LVMH “said it no longer wanted to buy Tiffany because the deal was being dragged into the middle of trade disputes between Paris and the Donald Trump administration”, The Wall Street Journal reports.
The French firm “also claimed that Covid chaos and violent protests across America have changed the situation”, The Telegraph adds.
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In a statement released yesterday, LVMH said: “The board learned of a letter from the French European and foreign affairs minister which, in reaction to the threat of taxes on French products by the US, directed the group to defer the acquisition of Tiffany until after 6 January 2021.”
The French firm said Tiffany had also pushed for the deal’s completion date to be pushed back to 31 December - after the US elections take place.
But LVMH claims the requested delays rule out a deal, because of a previous agreement stating that the purchase must be completed no later than 24 November.
Tiffany & Co has refuted that claim, however, and “added that LVMH is not required to follow French state diktat in Paris’s squabble with Washington”, says The Telegraph.
Tiffany chair Roger Farah said: “We regret having to take this action but LVMH has left us no choice but to commence litigation to protect our company and our shareholders.
“Tiffany is confident it has complied with all of its obligations under the merger agreement and is committed to completing the transaction on the terms agreed to last year. Tiffany expects the same of LVMH.
“We believe that LVMH will seek to use any available means in an attempt to avoid closing the transaction on the agreed terms. But the simple facts are that there is no basis under French law for the foreign affairs minister to order a company to breach a valid and binding agreement.”
