BUSINESS | Luxury Goods Giant LVMH Cancels $14.5B Deal For Tiffany

Luxury goods giant LVMH is ending its takeover deal of jewelry retailer Tiffany & Co., saying the French government had requested a delay to assess the threat of proposed U.S. Tariffs.

Wednesday’s announcement came after the deal’s value had been eroded by wider industry troubles caused by the coronavirus pandemic.

The Paris-based conglomerate said that both the French government and Tiffany had requested that the closing of the deal be postponed by a few months. The French government, it said, wanted to assess the impact of the possible U.S. tariffs on French goods.

As a result, LVMH said, the $14.5 billion deal – which would have been biggest in the luxury market and was scheduled to close Nov.24 – will be canceled.

Tiffany replied that it’s suing to enforce the merger agreement, which was signed in November 2019. The New York company said LVMH’s argument has no basis in French law. Tiffany also said that LVMH hasn’t even attempted to seek the required antitrust approval from three jurisdictions.

‘We believe that LVMH will seek to use any available means in an attempt to avoid closing the transaction on the agreed terms’, said Roger Farah, chairman of Tiffany in a statement.

Shares in Tiffany slid $7.85, or 6.4%, to close Wednesday at $113.96. those in LVMH, which owns 75 brands including Christian Dior, Fendi, Givenchy and Tag Heuer, were stable.

The deal’s value came under strain during the pandemic, which has caused retail sales to plunge around the world. Tiffany’s share price has been trading around $125 a share for weeks – below the $135 per share price that LVMH had agreed to play last fall, before the pandemic.

Back then, industry experts had said the deal made sense. Tiffany, known for its delicate jewelry, distinctive blue boxes and an Audrey Hepburn movie, had been trying to transform its brand to appeal to younger and more digital shoppers, and could have used an owner with deep pockets to help expand.

LVMH, led by billionaire Bernard Arnauld, had though the deal would strengthen its position in high-end jewelry and in the U.S. market. LVMH was also making  a bet on China’s economy, where Tiffany had been expanding its presence.

The pandemic threw all those assumptions and plans in doubt, and the threat of new tariffs between the U.S. and Europe was cited as a further complicating issue.

Before COVID-19, the global market for personal luxury goods was solid, reaching a record high of 307.1 billion (260 billion euros) in 2018 – a 6% increase from the year before, according to consulting firm Bain & Co. that sector slipped by 2.1.% to $331.0 (281 billion euros) last year, according to Bain estimates.

Last year, France sought to impose a tax on global tech giant including Google, Amazon and Facebook. The French tech tax is aimed to ‘establishing tax justice’. France wants digital companies to pay their fair share of taxes in countries where they make money instead of using tax heavens, and is pushing for an international agreement on the issue.

In response to the tech tax, the U.S. threatened to slap 100% tariffs on $2.4. billion of French products.

The two sides are a tense truce as France has said it would delay collection of the digital tax until December, parking the issue until after the next U.S. presidential election where Trump hopes to secure another four-year term.

In a news conference on Wednesday, French government spokesman Gabriel Attal confirmed that a letter was sent by French Foreign Minister Jean – Yves Le Drian to LVMH and referred to international talks about the U.S. tariffs as a ‘very important issue’.

‘The (French) government is neither naïve nor passive. We have objectives that we want to reach’, he said. He wouldn’t further elaborate and said that Le Drian is expected to express his views on the issue in the coming hours.

CEO Jean Jacques Guioy of the LVMH insisted in a phone interview with reporters that he letter received Sept.1 from the French government was legal and valid and left the group no choice.

Asked about lowering the price to keep the deal alive, he said that has not even been considered as there is no article in the contract that would allow that.

TRAVEL | Denmark Suspend Dubai Flights Amid Doubts Over Virus Tests

 DUBAI – Denmark has temporarily suspended all flights from the United Arab Emirates for five days after suspicion arose that the coronavirus tests that can be obtained before leaving Dubai are not reliable, authorities announced Friday. The development, which comes amid a surge of infections in the UAE, poses a direct challenge to the mass … Continue reading TRAVEL | Denmark Suspend Dubai Flights Amid Doubts Over Virus Tests

BUSINESS | Google Seals Content Payment Deal With French News Publishers

PARIS – – Google and a French publishers’ lobby said on Thursday they had agreed to a copyright framework for the U.S. tech giant to pay news publishers for content online, in a first for Europe.The move paves the way for individual licensing agreements for French publications, some of which have seen revenues drop with … Continue reading BUSINESS | Google Seals Content Payment Deal With French News Publishers

Business News | BioNTech Investors, Amid Worry Over Shortage, Vows Vaccines To Be Delivered For Second Shot

MILAN – European countries should use all available vaccine doses provided by biotech firm BioNTech and its partner Pfizer because there will be enough for the requisite second booster shot due to a planned production ramp – up, BioNTech’s largest investor said. Some countries were believed to be withholding some vaccines for fear of shortage … Continue reading Business News | BioNTech Investors, Amid Worry Over Shortage, Vows Vaccines To Be Delivered For Second Shot

BREAKING NEWS | Arab Coalition Thwarts Two Houthi Attacks

The Saudi – led coalition fighting against Yemen’s Houthi movement said it thwarted two attacks by the Houthis on Friday morning, including destroying an explosive – laden boat in the southern Red Sea, Saudi State TV said on Twitter. The coalition also intercepted and destroyed an explosive – laden drone launched by the Houthis toward … Continue reading BREAKING NEWS | Arab Coalition Thwarts Two Houthi Attacks

ARTS & CULTURE | Lebanon Return Two Stolen 18th – Century Religious Icons To Greece

ATHENS – – Lebanon handed back two 18th – century religious icons of Jesus and Mary to Greece on Tuesday after they were seized during an auction, a judicial sources said. The paintings were stole from an exhibition in Athens in 2016, and Greece put out an international notice calling for their return. Icons are … Continue reading ARTS & CULTURE | Lebanon Return Two Stolen 18th – Century Religious Icons To Greece

CORONAVIRUS | Saudi Arabia Reschedules COVID-19 Vaccinations Amid Pfizer Delay

RIYADH – – Saudi Arabia has rescheduled appointment for the administration of COVID-19 vaccine due Pfizer delivery delays, the Ministry of Health announced on Thursday in a tweet. Authorities said that those with appointments to receive their first dose will be rescheduled ‘due to the delay of the manufacturer in supplying the Kingdom and all … Continue reading CORONAVIRUS | Saudi Arabia Reschedules COVID-19 Vaccinations Amid Pfizer Delay

ENTERTAINMENT | Dubai Suspends Live Entertainment Permits As Covid-19 Cases Surge

MILAN – – Dubai has suspended live entertainment permits for hotels and restaurants amid a surge in COVID-19 cases according to an official circular issued by Dubai Tourism. ‘The Department observed, through field inspection, an increase in number violations during entertainment activities in hotels and restaurants. Accordingly. the Department directs all concerned in hotel establishments … Continue reading ENTERTAINMENT | Dubai Suspends Live Entertainment Permits As Covid-19 Cases Surge

BREAKING NEWS | Trump Pardons Ex – Aide Bannon But Not Himself Or Family

U.S. President Donald Trump granted clemency to former White House aide Steve Bannon as part of a wave of pardons and commutations issued in his final hours in office, but did not pardon himself, members of his family or lawyer Rudy Giuliani. Trump leaves office on Wednesday, when Joe Biden is sworn in as the … Continue reading BREAKING NEWS | Trump Pardons Ex – Aide Bannon But Not Himself Or Family

BREAKING NEWS | Saudi Crown Prince Receives Phone Call From French President Macron

RIYADH – – Saudi Arabia’s Crown Prince Mohammed bin Salman has received a phone call from French President Emmanuel Macron in which they discussed bilateral relations. ‘During the call, they reviewed relations between the two countries and opportunities for joint cooperation. Regional and international developments were discussed, and a number of issues of common interest … Continue reading BREAKING NEWS | Saudi Crown Prince Receives Phone Call From French President Macron

BREAKING NEWS | Saudi To Reopen Qatar Embassy In Coming Days – Saudi Minister

RIYADH – – Saudi Arabia expects to re-open its embassy in Qatar in the coming days, Saudi’s foreign minister said on Saturday, following a U.S.-backed détente last week in a three – year-old dispute between Arab states. It is just a matter a logistics, Saudi Arabia’s Foreign Minister Faisal bin Farhan told journalists in Riyadh … Continue reading BREAKING NEWS | Saudi To Reopen Qatar Embassy In Coming Days – Saudi Minister

Loading…

Something went wrong. Please refresh the page and/or try again.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s