Louis Vuitton owner LVMH said it will defend itself “vigorously” against a lawsuit filed by Tiffany & Co, which was launched after the luxury goods giant pulled out of a $16bn deal to acquire the jeweller.
Tiffany yesterday said it would sue LVMH to force it to complete the merger after the French conglomerate announced that it could not finalise the deal.
LVMH said it was “surprised” by the legal action, calling it “totally unfounded”.
The company said in response that it will challenge Tiffany’s handling of the coronavirus crisis, claiming that its first-half results were “very disappointing”.
In a statement the company said: “LVMH considers, among other things, that this period is impacted by a Material Adverse Effect, that Tiffany did not follow an ordinary course of business, notably in distributing substantial dividends when the company was loss making and that the operation and organization of this company are not substantially intact.
“LVMH therefore confirms that the necessary conditions for the conclusion of the acquisition of Tiffany are not fulfilled.”
LVMH yesterday said a “succession of events” had undermined the acquisition, including a letter from the French European and foreign affairs minister asking it to defer the deal until after 6 January due to the threat of taxes on French products by the US.
LVMH’s statement added that Tiffany had also asked the French group to postpone the closing of the deal to 31 December of this year from an already extended deadline of 24 November.
The company said its board had decided to stick to the terms of the original merger agreement, which states that the deal must be completed by 24 November.
However Tiffany refuted LVMH’s suggestion that it had breached its obligations under the merger agreement “or that the transaction is in some way inconsistent with its patriotic duties as a French corporation”.
Tiffany accused LVMH of failing to file for antitrust approval in three of the required jurisdictions in an attempt to delay the merger.