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Bernard Arnault: The LVMH accuses the Tiffany top management of "dishonesty" - and does not want to buy the US company anymore
Photo: Christian Hartmann / REUTERS
The French luxury group LVMH originally wanted to spend 16 billion dollars on the takeover of the US jewelry chain Tiffany.But instead of a glamorous deal, there is now a tough legal battle across national borders: After Tiffany announced on Wednesday that it would sue the French for the threatened collapse of the deal and to enforce the takeover in court, LVMH now intends to take legal action against the Americans.
The reason is the Americans' poor crisis management in the pandemic, as LVMH announced on Thursday in Paris.
The luxury goods company was also surprised by the Tiffany complaint announcement and considers it "completely unfounded".
From LVMH's point of view, Tiffany's course in court was prepared a long time ago and has now been communicated to the shareholders in a misleading manner.
This underlines the "dishonesty" in the relationship and dealings with LVMH.
On Wednesday, the Americans again accused LVMH of not having formally registered the deal, which had actually been planned since November last year, with the competition authorities.
This accusation has no substance and LVMH will prove it in court, the French clarified.
Bad Numbers: Tiffany Allegedly "Did Not Meet" Conditions for Takeover
In addition, the LVMH board of directors had taken a close look at Tiffany's current economic situation and found that the results for the first half of the year and the further outlook for 2020 were "very disappointing".
Especially in comparison to similar brands from the LVMH portfolio.
The French are therefore severely critical of the Americans' handling of the crisis and do not see the necessary conditions for the completion of the Tiffany takeover as having been met.
LVMH had already announced on Wednesday that the Paris luxury giant was currently unable to buy Tiffany after "a series of incidents".
Originally, the French wanted to put 16.2 billion US dollars on the table for the US company.
It would be the most expensive deal in LVMH's history.
But now LVMH ruler Bernard Arnault (71) - currently the third richest person in the world with private assets of around 114 billion dollars - is pulling the rip cord.
He doesn't even shy away from an expensive legal battle in the US to get rid of Tiffany after all.
Arnault had bought the world's largest luxury goods company through an aggressive expansion course in recent years.
Fashion brands such as Louis Vuitton, Dior and Fendi are part of his realm.
There are also champagne (Moët, Veuve Clicquot) and wineries, luxury hotels and the suitcase manufacturer Rimowa.
LVMH:
This is how the world's largest luxury company works
With a market value of around 200 billion euros, LVMH is the most valuable company in Europe - despite a business slump of 27 percent in the first half of the year, the price had risen by almost half from its low in mid-March.
The French also cited impending tariffs by the US government as reasons for the U-turn in the Tiffany case.
According to its own information, the LVMH group has since been informed that French products are threatened with taxation in the USA.
In addition, LVMH had taken note of a motion from Tiffany, according to which the deadline for the planned merger should be extended to December 31, 2020.
The deal was originally supposed to close in August, but Tiffany then took an option and extended the deadline to November.
la / dpa / reuters