LVMH Eyes Ways To Change $16.2B Tiffany & Co Purchase

LVMH is considering walking back its deal to purchase Tiffany & Co. for $16.2 billion due to the effects the pandemic and recent U.S. social unrest have had on the retail vertical, Reuters reported.

The deal was agreed upon last November, but it is still going through regulatory approvals.

LVMH CEO Bernard Arnault said in November that Tiffany would "thrive for centuries to come" under his company's management. But Arnault said he now has concerns about paying too much for Tiffany, and he reportedly has been talking with advisors on how to get Tiffany to lower the agreed price of $135 per share.

But Arnault, according to Reuters sources, has said he still believes in the strategy behind the acquisition, which would reward LVMH with a bigger stake in the U.S. jewelry market.

Reuters sources said Tiffany stated LVMH doesn’t have ground to go back on its word, and if the company contests LVMH 's attempts to renegotiate, the deal could end up going to court in Delaware. If the deal doesn't go well, it would be more difficult for LVMH to try again later.

Recently, though, with the pandemic's destruction of the retail sector and the civil unrest and protesting in the wake of the death of George Floyd in Minneapolis, retail sales volumes have been trending downward, and multiple deals are in jeopardy or have fallen apart due to the disruptions.

L Brands' Victoria's Secret, for example, will not be going through with a deal to be acquired by Sycamore Partners, CNBC reported. That deal, agreed on in February, fell apart in May as the companies agreed to let it die, citing its need to take proactive measures against the pandemic's financial negative effects.

In another case, SoftBank dropped out of its $3 billion deal to acquire the office-sharing startup WeWork, which was in trouble last year after a failed initial public offering (IPO). WeWork's former CEO, in return, has filed a lawsuit, and SoftBank CEO Masayoshi Son called the deal a mistake.



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