LVMH pulls out of $16B Tiffany deal

Yahoo Finance’s Brian Sozzi, Alexis Christoforous, and Ines Ferre discuss the latest between LVMH and Tiffany.

Video Transcript

BRIAN SOZZI: Luxury goods giant LVMH is set to pull out of its $16 billion deal with Tiffany and Co because of growing complications over the deal. Ines Ferre is back with those details. Ines, really not a good day for Tiffany's Board here.

INES FERRE: No, Not at all. And LVMH said that it had received a letter from the French government asking it to delay the acquisition of Tiffany to January 6 of 2021 because of the threat of additional US tariffs against French products. Also, LVMH statement said that Tiffany had asked LVMH to postpone the closing of the deal to December 31 of this year, and the closing date was supposed to be in November. And LVMH says that it wants to stick with its timeline.

Now, I have to say that separately that Tiffany is suing LVMH over delays of the deal. We've seen early reports over-- since the market started crashing in March, we've seen reports that LVMH was trying to really get out of this deal-- or lower the price of the deal really.

Remember that this deal was made before the pandemic. It was made in the fall of last year. At first, LVMH had offered $120 a share for Tiffany, and Tiffany said that was too low. So then they came up. They raised their price to $135 a share. Well, of course, with the pandemic, the speculation was that LVMH would try to lower that price, lower the deal because the luxury goods, of course, like many other industries, has gotten hit because of the pandemic. So now this is all unraveling, unwinding as LVMH is saying it will walk away from this $16 billion deal because of these tariff concerns also because of this timeline issue. Separately, Tiffany suing LVMH. Brian.