LVMH can’t rely on French government letter, Tiffany says
French foreign minister is seeking a delay in deal as part of a trade dispute with the US
Friction between LVMH and Tiffany emerged in March as the depth of the economic fallout from the pandemic became apparent. Photograph: Cyril Marcilhacy, Bloomberg
LVMH can’t rely on a letter from the French government requesting a delay of its $16 billion (€13.6 billion) purchase of Tiffany and Co to justify its decision to pull out of the deal, the US jewellery retailer said in a court filing.
The letter from French foreign minister Jean-Yves Le Drian seeking a delay as part of a trade dispute with the US doesn’t amount to a “legal restraint” under the acquisition agreement, Tiffany said in a Delaware Chancery Court filing made public on Monday.
“LVMH nowhere contends that the foreign minister has any jurisdiction over the transaction”, because they know European Union regulators handle antitrust reviews and Le Drian can’t stop the deal, the US luxury jewellery chain contends in the filing.
Jonathan Doorley, a US-based spokesman for the maker of Louis Vuitton bags and shoes, declined to comment on the filing.
The deal was announced last November, but friction between LVMH and Tiffany emerged in March as the depth of the economic fallout from the pandemic became apparent. LVMH earlier this month cited Le Drian’s letter in seeking to cancel the purchase and later also lambasted New York-based Tiffany’s response to Covid-19.
Tiffany sued to force LVMH to go forward with the acquisition, saying in a court filing that LVMH was trying to use the luxury downturn from the pandemic to negotiate a lower deal price. A judge will hear arguments on Tuesday on Tiffany’s request to fast-track its suit. The deal has a November 24th closing deadline, and Tiffany is hoping the judge will rule on whether LVMH must proceed with the deal by that date. - Bloomberg