LVMH And Tiffany End Luxury Battle, Cut Price On $16 Billion Takeover

It cited a French political intervention asking it to delay completing the acquisition until Jan. 6 due to a threat of new U.S. tariffs on French products, and also decried the jeweller’s “dismal” performance during the coronavirus crisis.

Tiffany in return sued LVMH in a Delaware court, seeking to force it to honour the original deal. The case had been scheduled to be heard in early January.

However, a source close to the matter told Reuters on Wednesday that Tiffany had recently approached LVMH with a more conciliatory tone.

This source said the worsening pandemic in Europe and the United States also played a role in bringing the two sides back to the negotiating table as business conditions deteriorate, and that discussions over Tiffany’s management under LVMH had been left for a later date.

“We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger, said Tiffany Chairman Roger Farah.

“The board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing.”

BREAKFAST AT TIFFANY’S

Some analysts have questioned why LVMH had sparked such a bitter dispute with Tiffany for what ended up being a relatively modest price cut, though ending the spat allows the French group to save on potentially costly legal fees.

The deal is designed to boost LVMH’s smallest business, the jewellery and watch division that is already home to Bulgari and Tag Heuer, and help it expand in one of the fastest-growing industry segments while also strengthening its U.S. presence.

New York-based Tiffany, immortalised in the 1961 movie Breakfast at Tiffany’s starring Audrey Hepburn and known for its signature pale blue boxes, retains a resonance as the go-to purveyor of engagement rings that only a handful of rivals can match.

(Writing by Silvia Aloisi; Editing by David Goodman and Pravin Char)