LVMH to walk away from Tiffany takeover
French luxury goods company LVMH said on Wednesday it was prepared to walk away from its planned takeover of Tiffany, triggering a lawsuit from the American luxury jeweller in response.
The French luxury goods giant cited a "succession of events" which had undermined the proposed acquisition, including the threat of US taxes on French products.
LVMH's board also noted Tiffany's request to extend the outside date for the merger from the already contractually agreed 24 November to 31 December.
But following a legal analysis, and given that the purchase agreement set a deadline for transaction close of, in any case, no later than 24 November, LVMH decided that it now could not complete the acquistion.
Just two weeks before, Tiffany had asked for a three-month extension to close the $16.2bn takeover, until 24 November, as was its right under the agreement inked by the two companies towards the end of 2019.
Under the original purchase agreement, either firm could request such an extension if the only remaining hurdle was regulatory clearance.
Tiffany alleged that was now the case, but that the French firm was making concerted efforts to delay or avoid regulatory approval which was in breach of their merger agreement.
New York-based Tiffany said that as of 24 August, the original target date for the acquisition, LVMH had not yet even filed for approval with the European Union or Taiwan and that applications with Mexican and Japanese authorities remained outstanding.
Tiffany also refuted LVMH's "suggestions" that it had undergone a so-called 'Material Adverse Effect' nor breached its obligations or that the transaction was somehow "inconsistent with its patriotic duties as a French corporation".