The long-awaited purchase of Tiffany & Co by LVMH Moët Hennessy – Louis Vuitton SE has come to a bitter end, with Tiffany taking legal action over the collapsed $16.2 billion (£12.5 billion) deal.
What would have been the biggest ever sale of its kind within the sector now appears to be on ice if not dead in the water, with Tiffany announcing this morning it has already filed to sue in the Court of Chancery of the State of Delaware.
This comes almost 10 months after the companies first agreed on the deal, and weeks after LVMH missed the first deadline for the purchase.
The pair had been working towards a revised deadline of 24 November, three months after the initial date, under a clause in the contract.
However, as of this morning, the deal has now fallen apart, first reported by the Financial Times.
Tiffany’s lawsuit, the FT suggested, is a negotiation tactic designed to force LVMH to honour its deal.
Negotiations reportedly broke down when LVMH received a demand from the French government to stand down in the deal in order to not undermine an ongoing trade war with the US.
Roger N. Farah, chairman of the board, 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.”
Chief executive officer Alessandro Bogliolo said, “The fundamental strength of Tiffany’s business is clear. The company has already returned to profitability after just one quarter of losses, and we expect our earnings in the fourth quarter of 2020 will actually exceed the same period in 2019.”
Read below about the initial signing of the deal last November: