The luxury industry’s biggest takeover has collapsed with the US jeweller saying LVMH is trying to use police brutality protests and Covid-19 to get a lower price
London/Paris — The luxury industry’s biggest takeover has collapsed into acrimony as LVMH moved to call off a $16bn purchase of Tiffany & Co, which countered with a lawsuit to try to keep the deal on track.
The deal, struck in November 2019, ran into trouble after coronavirus-related lockdowns closed shops around the world and curbed international travel, hitting demand for luxury goods. Adding Tiffany was seen as a way for LVMH chair Bernard Arnault to bolster the French company’s US presence by adding an iconic label known for its robin’s egg blue packaging.
“It’s a great way out for LVMH,” said Keith Temperton, a trader at Lombard Forte Securities, in an e-mail. “They had paid a top-of-the-market price ahead of the pandemic for Tiffany. Their efforts to wriggle out of it are not surprising.”Last month, the jeweller extended the deal deadline by three months, to November 24, prompting LVMH to say it reserves the right to challenge the new closing date.
A month before LVMH and Tiffany struck their deal last year, Arnault traveled to Texas to join US President Donald Trump at a ribbon-cutting ceremony for a new Louis Vuitton factory, part of a plan by the French tycoon to hedge against trade tensions.
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