The French luxury giant said it likely won’t be able to complete its planned $16.2 billion acquisition of the American jeweler after France’s Minister for Europe and Foreign Affairs asked LVMH to defer the transaction beyond Jan. 6, 2021. The request was made in the wake of a U.S. threat to slap tariffs on a range of French products.
It also said LVMH’s board of directors recently met “after a succession of events likely to weaken the transaction to acquire Tiffany & Co.” Tiffany noted: “Under the terms of the merger agreement, LVMH assumed all antitrust-clearance risk and all financial risk related to adverse industry trends or economic conditions. In addition, LVMH is required to do everything necessary to secure all required regulatory clearances as promptly as practicable.”LVMH has not filed official requests for antitrust approval in the European Union or Taiwan, the jeweler said.
“Moreover, this supposed official French effort to retaliate against the U.S. for proposed new tariffs has never been announced or discussed publicly; how could it possibly then be an effort to pressure the U.S. into revoking the tariffs?” Farah said. “Furthermore, as we are not aware of any other French company receiving such a request, it is all the more clear that LVMH has unclean hands.”
“[B]ecause the implementation of these tariffs may affect France’s external relations, for which my department is responsible, proposed investments by French companies in sectors that could be subject to such sanctions must be reevaluated in light of this new context,” read the letter. “My attention was drawn to the most important current investment, which is your Group’s pending acquisition of Tiffany.