Luxury goods giant LVMH is calling off its takeover deal of& Co., citing in part the threat of proposed U.S. tariffs on French goods.
The Paris-based conglomerate said that it needs more time to assess the impact of the possible U.S. tariffs on French goods and cannot close the deal before year-end. It added that the French government had asked the company to delay its purchase of Tiffany until after January 6, citing the threat of U.S. taxes on French products.
When the deal was, Tiffany said the deal would ensure its long-term sustainability. The retailer — known for its distinctive blue boxes and delicate designs, as well as a Truman Capote novel and Audrey Hepburn movie — would have received a boost from a company with deep pockets as it sought to expand its business and reach more young consumers.
The $16.2 billion deal was scheduled to close Nov. 24.
Tiffany said Wednesday that it will sue LVHM in U.S. court to enforce the merger agreement. The New York company said LVMH's argument has no basis in French law. Tiffany also said that LVMH hasn't sought antitrust approval from three jurisdictions.
Tiffany chairman Roger Farah said in a statement that the company had "no choice" but to sue LVMH to protect its company and 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," Farah said.
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