Luxury goods conglomerate LVMH has dropped its $14.5-billion offer for Tiffany amid the fallout of the coronavirus pandemic and a threat of U.S. sanctions.
The AP’s Anne D’Innocenzio reported:
Luxury goods giant LVMH is ending its takeover deal of jewelry retailer Tiffany & Co., saying the French government had requested a delay to assess the threat of proposed U.S. tariffs.
Wednesday’s announcement came after the deal’s value had been eroded by wider industry troubles caused by the coronavirus pandemic.
Michelle Toh from CNN wrote:
The United States announced in July that it would impose tariffs of 25% on French products, including makeup and handbags, as part of a dispute over taxing digital companies, but delayed collection of the tariffs until January 6, 2021. LVMH said Wednesday that the French government had “directed” it to delay the acquisition beyond that date.
The New York Times’ Lauren Hirsch and Elizabeth Paton noted:
Tiffany is now facing several uncomfortable prospects beyond its expensive looming legal battle with LVMH: The deal may eventually be completed, potentially at a discounted price, or Tiffany could remain a stand-alone company looking for a buyer once more, in a much less certain world.