LVMH tried to walk from a ~$16B deal for Tiffany. Apparently it isn’t familiar with Delaware laws.

Delaware courts frown upon buyer’s remorse… which is why LVMH looks like it’ll end up buying Tiffany’s after all.

October 28, 2020

Listen, we’ve all been there.

You’ve agreed to buy something on eBay but then got wet feet and told the seller, “Hey, sorry, my significant other says we can’t afford this.”

LVMH Moët Hennessy Louis Vuitton (LVMH) — the $211B conglomerate owned by France’s richest man, Bernard Arnault — basically tried to do the M&A equivalent of that move.

In 2019, LVMH announced a blockbuster ~$16B deal for Tiffany

The move was meant to boost the luxury house’s fast-growing watch and jewelry lines as well as lay claim to a splashy American brand.

Then the pandemic hit and lux retail didn’t look so hot. Tiffany’s same-store sales fell by 44%, and LVMH had some serious buyer’s remorse.

In September of this year, LVMH tried walking from the deal, citing concerns over US-EU tariff disputes.

US courts don’t look kindly on deal mulligans

Tiffany sued LVMH to consummate the deal, and LVMH sued back, citing that the pandemic had caused “material adverse effects.”

Per The Economist, courts in Delaware — the business-friendly state where ~50% of S&P 500 companies are incorporated — have only broken a corporate marriage due to “material adverse effects” one time (a health care deal).

Now, LVMH is in talks with Tiffany to close at a slightly lower price.

Sorry, Bernard — this ain’t eBay.

Join 1.5m+ professionals getting The Hustle daily news brief

Business and tech news in 5 minutes or less

100% free, no ads or spam, unsubscribe anytime


How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.

If you don’t like it, unsubscribe any time. Privacy policy.