LVMH scraps deal with Tiffany
Louis Vuitton owner LVMH is scrapping its $16.2 billion acquisition of Tiffany, a deal that would have been the biggest ever in the luxury industry.
The luxury-goods giant said Wednesday the merger agreement signed last November provides for a closing deadline of no later than Nov 24, 2020.
But Tiffany had requested extending the date to Dec 31, and the French minister of foreign affairs had directed the company to defer the deal until after Jan 6 due to a US threat of taxes on French goods.
The company said in a statement that it will not be able to complete the acquisition of Tiffany "as it stands."
The coronavirus pandemic has hit the luxury retail sector hard, sending Tiffany's same-store sales down 44% and throwing the LVMH deal into doubt.
Investors worried whether the French company overpaid, and LVMH CEO Bernard Arnault was looking to lower the price of buying the US jewelry chain, according to people familiar with the matter.