LVMH cites "patriotism" to ditch Tiffany's

A ring in a box of jeweller Tiffany's
Photo: graceliuphotos /

Luxury group LVMH has decided to cancel its acquisition of American jeweller Tiffany's, saying it follows a request by the French government. A tough legal battle is expected to follow.


Politics at play

What at first seems like a lovely Franco-American romance, is ending in a bitter separation due to the Covid-19 crisis. At the end of last year, LVMH offered fourteen billion euros for the American company, but had been having cold feet for a while. A request by the French government has now made the acquisition completely impossible, the luxury group claims.


LVMH says it has been requested by the French Foreign Ministry to delay the Tiffany acquisition to after 6 January 2021, following threats by American president Donald Trump to impose extra fines on French products, making the French government not too eager to face a billion-euro deal between the two countries.


“Contrary to patriotic duties”

Still according to the French group, the American jeweller has refused the delay, making billionaire Bernard Arnault's company "incapable of completing the acquisition of Tiffany & Co". The latter has responded immediately by going to court to force LMVH to honour the deal, accusing the French group of deliberately and unjustifiably delaying the deal. They also deny the argument that LVMH can escape from the deal on patriotic grounds.


It is generally thought that the main reason to get out of the deal is not patriotism but rather the harsh economic reality: the economic damage due to the coronavirus. The luxury sector is faced with huge turnover drops of up to 35 % after a decade of spectacular growth. It may take a couple of years to get back to pre-Covid levels, consultancy firm Bain said.


Meanwhile, LVMH has intensified the legal battle by going to court as well: Arnault's company said that Tiffany's was looking for a reason to go to court for a while, while the problem lies fully in the American company, LVMH says: according to them, the American company has been suffering from mismanagement during the Covid crisis, and is accused of unfair practices. Moreover, Tiffany's forecasts are reportedly very disappointing.