Major French luxury goods maker LVMH Moet Hennessy Louis Vuitton SE has announced that despite an agreement dated November 2019, it will not be able to complete its acquisition of US Tiffany & Co.

In a press release, LVMH explained that the company was approached by the French Ministry of Foreign Affairs: the department asked to postpone the deal until 2021 due to the threat of imposing duties on French goods in the United States, Interfax reports .

In all likelihood, we are talking about the consequences of a possible small trade war. After the summer of 2019, French President Emmanuel Macron signed a law imposing a 3% tax on the income of large technology companies associated with the sale of digital services in the country. Its main “victims”, as Deutsche Welle wrote in July , should be the American giants Google, Apple, Facebook and Amazon.

In response, the US announced that it was ready to raise duties on a number of goods imported from France, including cosmetics and handbags. On July 10, the entry into force of these duties was postponed for 180 days.

“Under the current circumstances, the LVMH group will not be able to complete the purchase of Tiffany & Co.,” Interfax quoted the message as saying. LVMH is also citing Tiffany’s request to push back the deadline for closing the deal to December 31st.

At the same time, the deadline has already been postponed for three months – until November 24. Under the terms of last year’s deal, LVMH planned to pay $16.2 billion for Tiffany.

The rejection of the deal was the occasion for yet another conflict – this time at the corporate, not the state level. Tiffany announced that it has filed a lawsuit against LVMH in Delaware. The American company believes that LVMH cannot refuse the deal, citing “patriotic obligations.”

Leave a Reply

Your email address will not be published. Required fields are marked *