The biggest takeover in the history of the luxury goods industry fell through when Louis Vuitton’s parent company pulled the trigger on its bid for Tiffany

LVMH’s takeover of Tiffany fell through.

On the evening of September 9, foreign media reported that LVMH, the parent company of Louis Vuitton brand and the world’s largest luxury goods group, announced that it would not buy American jewelry brand Tiffany for 16.2 billion DOLLARS. The deal would have been the biggest acquisition in the history of the luxury goods industry.

In a public statement, LVMH said it had received a letter from the French Foreign Ministry asking it to postpone its purchase of Tiffany until Jan. 6 in response to the U.S. government’s threat to impose taxes on French goods. At the same time, LVMH group said that it also received a request from Tiffany to extend the deadline for the acquisition from November 20 to December 31.

In view of the above reasons, LVMH Group said that after the decision of the board of directors, it would not be able to complete the acquisition of Tiffany according to the current situation.

LVMH shares fell 0.2% to close at $94.95 on the news.

The Financial Times notes that this would have been the biggest deal ever in the luxury goods industry, but the coronavirus has made a big difference to the business landscape. The epidemic has hit luxury retail hard, with Tiffany’s same-store sales down 44%, according to the data.

The pandemic has also given LVMH the idea of renegotiating its takeover price. LVMH CHIEF Executive Bernard Arnault has been trying to find a way to pressure Tiffany to lower the $135-a-share deal agreed between the two companies, Reuters reported, citing people familiar with the matter. In their negotiations, LVMH and Tiffany have agreed to extend the initial takeover deadline from August 24 to November 24, but the relationship has deteriorated.

In June Tiffany threatened to Sue if LVMH tried to renegotiate the terms of the deal.

On September 9, the Financial Times, citing people familiar with the matter, reported that Tiffany had accused LVMH of deliberately dragging out the antitrust approval process and was attempting to force the company to resume takeover talks through other measures. On Wednesday, Tiffany filed a lawsuit against LVMH in the U.S. District Court in Delaware.

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