Kaiser, whose illustrious career spanned decades, died suddenly on Friday.
Tiffany Sues After LVMH Looks to Call Off Acquisition
The stage is set for a protracted legal battle as the $16 billion deal seems set to dissolve.
New York—LVMH announced that it is backing out of its agreement to buy Tiffany & Co., and the retailer is not happy about it.
In a statement issued Wednesday morning, LVMH cited closing date issues—Tiffany reportedly asking for a second extension to Dec. 31, 2020 and the French government requesting LVMH wait until January 2021 because of proposed U.S. tariffs on French luxury goods—as the reason for its decision to call off the deal.
LVMH said: “As a result of these elements, and knowledge of the first legal analysis led by the advisors and the LVMH teams, the board decided to comply with the merger agreement signed in November 2019 which provides, in any event, for a closing deadline no later than Nov. 24, 2020 and officially records that, as it stands, LVMH will therefore not be able to complete the acquisition of Tiffany & Co.”
Tiffany responded with its own statement Wednesday morning, announcing it was suing LVMH in an attempt to force it move forward with the $16.2 billion deal.
It claims LVMH has breached the merger agreement, dragging its feet on its obligations and searching for loopholes to get out of the acquisition as outlined.
LVMH, the retailer claims, did not uphold its obligation to “do everything necessary” to secure all required regulatory clearances as promptly as possible.
The merger agreement originally set the deal’s closing date for Aug. 24 but Tiffany asked to extend to Nov. 24—an extension allowed under the agreement—because they still needed a number of antitrust clearances, which Tiffany says LVMH has not been proactive in getting.
As of Aug. 24, with only three months to go until the Nov. 24 closing date, Tiffany noted that, “LVMH had not even filed for antitrust approval … in the European Union or Taiwan, and applications are still outstanding in Japan and Mexico, all due to LVMH’s concerted efforts to delay or avoid receipt of regulatory approvals in those jurisdictions in breach of the merger agreement.”
The specialty jeweler also claimed LVMH was using the purported tariffs as an excuse to back out of the deal.
LVMH said it received a letter dated Aug. 31 from France’s Ministry of Europe and Foreign Affairs informing it of a U.S. government threat to put additional taxes on French products, particularly luxury goods.
The ministry asked the Paris-based luxury conglomerate to show support for France’s efforts to
But Tiffany said there is no basis in French law for the Foreign Affairs Minister to order a company to breach a valid and binding agreement, and it accused LMVH of using “any available means in an attempt to avoid closing the transaction on the agreed terms.”
LVMH Moët Hennessy Louis Vuitton announced its intention to acquire Tiffany in November 2019, with the deal originally set to close in mid-2020.
Then COVID-19 hit, taking a toll on luxury retail worldwide.
By June, rumors began to circulate that the deal was on shaky ground, with LVMH Chairman and Chief Executive Bernard Arnault reportedly seeking to pay a lower price for the storied retailer.
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