What was supposed to be "only" the largest transaction ever to take place in the luxury sector, worth 16,2 billion dollars, has become a political case. The negotiations that should have ended with the purchase, by the French luxury group LVMH, of the historic American jewelery brand Tiffany, are abruptly halted. And the reason is anything but financial: in the communiqué released by the same group led by Bernard Arnault it is explicitly explained that it had received a letter from the French Foreign Minister, Jean-Yves Le Drian, asking Louis Vuitton Moet Hennessy to postpone the acquisition until after January 6, 2021, as “response to US threat of tax on French products”.
Tiffany herself had given Lvmh some more time, waiting for the go-ahead from the Antitrust, for which the French group itself is also late in making requests (the one against the EU has not even been presented yet): initially it should have closed on August 24th, but now the brand made known (also) by Audrey Hepburn has obtained an extension to December 31st 2020. But in reality it will go even further, for geopolitical reasons. And Tiffany is already on a war footing: sued the French group in the Delaware court because it respects its contractual obligations, arguing that the French government's request "has no foundation".
According to the agreement, according to Tiffany's website, LVMH “assumed all the risks of antitrust authorization and all the financial risks relating to adverse economic trends or conditions in the sector. LVMH is therefore required to do everything necessary to guarantee all the required regulatory authorizations as quickly as possible". For Tiffany, in short, "there is no legal basis" in French law for which the French Foreign Minister is asking LVMH to adopt measures to dissuade the American authorities from implementing tariffs on French goods. In short, at the moment Arnault will not be having… breakfast at Tiffany's. But the war has just begun.
