LVMH said Tuesday it has filed a lawsuit against Tiffany in an attempt to abandon the $ 16.2 billion acquisition that would be the largest ever in the luxury sector.
The lawsuit, filed Monday in Delaware, says LVMH “continues to have full confidence in its position that the conditions necessary to close the Tiffany acquisition have not been met.” He adds that “the spurious arguments advanced by Tiffany are completely unfounded”.
The announcement is the latest in a saga that saw the owner of Louis Vuitton cancel the acquisition in early September. In a statement at the time, France̵
The company cited the threat of US tariffs on French products and Tiffany’s request to extend the deal’s expiration to the end of the year.
The Tiffany jewelry chain immediately filed a lawsuit in Delaware to enforce the deal, saying the French government’s request had no legal basis.
In Monday’s lawsuit, LVMH mentioned the coronavirus crisis, saying a “material adverse effect” had occurred. In a strong rebuke, he also criticized Tiffany’s “mismanagement of his business” which, he said, constituted a blatant violation of his obligation to operate in the normal course.
“For example, Tiffany paid the highest possible dividends while the company burned cash and reported losses. No other luxury company in the world did this during this crisis. There are many examples of detailed mismanagement in the deposit, including cutbacks. marketing capital and investment and taking on additional debt, ”LVMH’s statement said Tuesday.
A spokesperson for Tiffany was not immediately available for comment when he was contacted by CNBC.
—Amelia Lucas and Lauren Thomas of CNBC contributed to this article.