Did French President Macron himself ask for the takeover deal between LVMH and Tiffany to be blown up? While the rumour mill is running, the legal battle is taking shape: in January, the fate of the fiancées will be settled.
Diplomatics or nepotism?
The French presidential palace is said to have asked Secretary of State Jean-Yves Le Drian himself to send a letter to LVMH advising it to postpone the purchase of the American jeweller Tiffany. That is what two anonymous insider sources say to Reuters. Although the rumour remains unconfirmed, it would be an important indication that LVMH owner Bernard Arnault is really willing to do anything to get out of the takeover deal.
After all, LVMH announced earlier this month that it would be forced to abandon the acquisition, which had been concluded a year earlier for a generous acquisition price of 16 billion dollar. One of the arguments was that the luxury group had received a letter from its government asking it to wait until January, after the US presidential elections and ‘coincidentally’ after the deadline, because Trump is threatening to impose new taxes on French products. To conclude a billion-dollar deal with Americans just now would be politically unfavourable in that climate.
For LVMH, the letter was reason enough to break the engagement out of ‘patriotic obligations’. However, if the letter did not come from the State Department but was written under pressure from Macron itself, there is a chance that it was the influential Bernard Arnault himself who pulled a few strings in the very highest political regions. After all, there would have been a long-standing friendship between Delphine Arnault, the daughter of France’s richest man, and French ‘first lady’ Brigitte Macron.
Trial starts after deadline
The decisive court case will start on 5 January in the United States. Although the lawsuit starts when the deadline for the takeover (24 November) has already passed, the outcome will be binding with retroactive effect. The court also hopes that an amicable settlement will be reached before then.
In a statement, LVMH said it is “confident” that it can convince the court that Tiffany no longer fulfils the conditions for the deal. The main argument is that the jewellery chain dealt badly with the corona crisis and suffered serious damage. However, Tiffany’s lawyers – along with many analysts – believe that LVMH is primarily seeking to force a lower takeover price.
