European Union regulators have blessed LVMH’s $16 billion marriage with Tiffany & Co. — but the fate of the deal still hinges on a court battle in the US.
The European Commission’s Monday decision to clear the tie-up means the French luxury conglomerate and the storied jeweler have now received all regulatory approvals needed to complete the acquisition, Tiffany said in a securities filing.
The clearance came ahead of the Nov. 24 deadline the two companies had set for completing the deal announced nearly a year ago, which would be LVMH’s largest acquisition ever if it’s ultimately closed.
But it also came amid a bitter legal spat sparked by LVMH’s move to abandon the Tiffany takeover in early September, prompting the New York-based engagement ring maker to sue to keep the deal intact.
The Delaware Chancery Court has scheduled a trial for January in the case, in which Tiffany accused Paris-based LVMH of dragging its feet on seeking approval for the acquisition from antitrust authorities in key jurisdictions including the European Union.
LVMH countersued late last month, claiming Tiffany’s business prospects had turned “dismal” because of the coronavirus pandemic that led the 183-year-old retailer to post a $65 million loss in the spring. Tiffany called the argument “specious” given that it returned to profitability after one rough quarter.
LVMH has also cited a letter from the French government that purportedly barred it from proceeding with the deal in response to the US’s threat to impose tariffs on French goods. Tiffany has blasted those claims as “excuses.”
LVMH did not immediately respond to a request for comment on the EU’s approval of the deal on Tuesday.
A Global Asset Management Seoul Korea Magazine