LVMH Scraps $16.2B 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, reported Reuters. 

The luxury-goods giant said Wednesday the merger agreement signed last November provides for a closing deadline no later than Nov. 20, 2020. But Tiffany had requested to extend 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.” It said it needs additional time to figure out any impact from potential US tariffs on French goods, and therefore can’t close the deal before the end of the year.

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.