After what has been a very odd mating ritual between LVMH and Tiffany, the dance has seemingly come to an end. Not a good one, but an end at least.
Breaking news, luxury-goods giant LVMH just stated it is backing out of its USD 16+ billion takeover of Tiffany & Co. As per the Wall Street Journal’s report “LVMH said it no longer wanted to buy Tiffany because the deal was being dragged into the middle of trade disputes between France and the Trump administration”.
As per Bloomberg “LVMH said the French government had asked the company in a letter to delay the deal beyond Jan. 6, 2021, citing a U.S. move to impose tariffs on goods from France”.
Politics aside, it makes perfect economic sense for LVMH to back out of the deal. The deal and price was negotiated pre-Covid19 and had Tiffany’s valued at a point that does not reflect its current – much lower – value since the deal was negotiated.
Tiffany has launched a last resort lawsuit to try and keep the deal from completely unravelling. The news has crushed Tiffany’s stock price… and left LVMH’s mostly untouched.