Tiffany & Co has launched legal action against Louis Vuitton owner LVMH after the luxury goods giant said it would walk away from a $16bn deal to buy the jewellery firm.
Tiffany has filed a lawsuit seeking to force LVMH to complete the merger after the French conglomerate announced this morning that it could not finalise the deal.
LVMH 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.
“As things stand, the Group would therefore not be in a position to carry out the acquisition of Tiffany,” it said.
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.
Tiffany chairman Roger N Farah said: “We regret having to take this action but LVMH has left us no choice but to commence litigation to protect our company and our shareholders.
“Tiffany is confident it has complied with all of its obligations under the merger agreement and is committed to completing the transaction on the terms agreed to last year. Tiffany expects the same of LVMH.”