LVMH clarifies stance on Tiffany & Co deal
LVMH has clarified its position on its planned acquisition of Tiffany & Co following reports that the deal was in question.
In a brief statement the French luxury conglomerate, which is home to Louis Vuitton, Dior and Givenchy, said: "The Board of Directors of LVMH Moët Hennessy Louis Vuitton, met on Tuesday, 2 June, 2020 and notably focused its attention on the development of the pandemic and its potential impact on the results and perspectives of Tiffany & Co with respect to the agreement that links the two groups.
"Considering the recent market rumors, LVMH confirms, on this occasion, that it is not considering buying Tiffany shares on the market."
LVMH reached an agreement last October to buy Tiffany & Co for $16.2 billion in a move designed to strengthen its position in the luxury jewellery market, where it already owns brands such as Bulgari and Chaumet.
The move was also designed to give LVMH a much bigger foothold in the United States, while Tiffany & Co, which has been trying to reposition to appeal to a younger consumer, said the deal would deal would ensure the company’s long-term sustainability.
However rumours began to circulate this week the deal was in question due to the upheaval in the US economy and concerns about the jeweller's ability to cover its debt covenants at the end of the transaction, which is expected to conclude mid-year.
However the company has said that while it is not buying the shares on the open market, nothing has changed in regards to its plans for the acquisition.