French Luxury Brand Conglomerate LVMH has announced it has withdrawn from its $16.2 Billion agreement to purchase Tiffany & Co. In response, Tiffany has announced it will sue to enforce the agreement, which valued the American jeweler at $135 per share.
LVMH cited international tensions as the key reason for pulling out of the deal. The company received a notice from the French government asking it to delay the merger closing by one month due to U.S. threats to impose tariffs on French goods. Instead, it called off the merger, saying it does not want to be pulled into a trade dispute.
However, that would not appear to be the true reason. Luxury retail has struggled since the pandemic began and LVMH has been exploring ways to either get out of, or negotiate down the price for Tiffany. This trade dispute just seems to be the most convenient way to withdraw from the deal.