Luxury goods giant LVMH backs out of Tiffany takeover

Luxury goods giant LVMH is ending its takeover of jewelry retailer Tiffany & Co, saying the French government had requested a delay to the agreement due to the threat of proposed US tariffs on French goods.

The Paris-based conglomerate said that both the French government and Tiffany had requested that the closing of the deal be postponed. The French government, it said, wanted to assess the impact of the possible US tariffs on French goods.

As a result, LVMH said, the US$14.5 billion deal that was scheduled to close November 24 will be canceled.

Tiffany replied that it’s suing to enforce the merger agreement, which was signed in November 2019. The New York company said LVMH’s argument has no basis in French law.

Tiffany also said that LVMH hasn’t even attempted to seek antitrust approval from three jurisdictions.

Last year France sought to impose a tax on global tech giants including Google, Amazon and Facebook. The French tech tax is aimed at “establishing tax justice.”

France wants digital companies to pay their fair share of taxes in countries where they make money instead of using tax havens, and is pushing for an international agreement. The US threatened to slap 100 percent tariffs on US$2.4 billion of French products.