The French holding LVMH and the American manufacturer of jewelry and other luxury goods Tiffany have agreed on new terms of the deal, which provide for a reduction in the value of one Tiffany share.
In September 2020, the owner of Louis Vuitton refused to buy Tiffany for 16.2 billiondollars due to a change in the timing of the deal. The LVMH Board of Directors considered the request of the French Foreign Minister to postpone the closing of the deal until January 6, 2021 due to the threat of imposing taxes on French products from the United States, as well as Tiffany’s request to postpone the final date until December 31.This violates the original agreement that the deal must be closed by November 25, 2020, LVMH explained. Therefore, LVMH will not be able to close the deal “as is,” the statement said. In response, Tiffany filed a lawsuit with a request to fulfil the obligations of the second party within the set time frame.
With the new value of one share, the original transaction amount will decrease by $ 425 million, or 3%. With the conclusion of the new deal, the companies’ litigation is terminated. The parties plan to close the deal early next year.
The purchase of the asset is intended to strengthen LVMH’s position in the global jewelry market. The presence of Tiffany in the portfolio will allow the holding to compete with Richemont, the owner of Cartier.