Luxury giant LVMH, Tiffany due in US court next year

AFP
A US court is to hear a lawsuit by Tiffany against LVMH in January, but Bloomberg news agency reported that the two sides have been urged to try and patch things up before then.
AFP

A US court is to hear a lawsuit by jeweller Tiffany against French luxury giant LVMH in January, but Bloomberg news agency reported that the two sides have been urged to try and patch things up before then.

A planned tie-up worth an estimated $16.2 billion was announced in late 2019, which would make it the luxury sector's biggest deal this century.

However, it was called off by LVMH when it said on September 9 that it "will not be able to complete the acquisition."

LVMH said it had learnt of a letter from French Foreign Minister Jean-Yves Le Drian directing it to defer the deal in reaction to Washington's threat to levy taxes on French products.

Tiffany swiftly threatened to sue, and on Monday, a US court approved a fast-track process that is to take four days, starting January 5, Bloomberg said.

Bloomberg quoted the judge at the Delaware court as saying that both companies should weigh whether to hold "productive conversations to avoid litigation."

Tiffany welcomed the decision and board chairman Roger Farah said in a statement that "we will demonstrate to the court that LVMH is in clear breach of its obligations under a valid and binding agreement."

LVMH said only that it "takes note of the decision" and "is fully confident that it will be able to defeat Tiffany's accusations and convince the court that the conditions necessary for the acquisition of Tiffany are no longer met."

Arnaud Cadart, portfolio manager at Flornoy & Associes, told AFP that previous charges and countercharges by the two companies "were too violent to allow for a reconciliation."

He also remarked, however, that "LVMH's history is comprised of many surprises."

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