LVMH Chairman Bernard Arnault asked for help from the French government in an effort to pull out of a deal to buyTiffany, according to a person familiar with the government’s thinking.
The wealthiest man in France initiated the move that led to the world’s biggest luxury conglomerate announcing it would no longer buy the U.S. jewelry maker, according to two people familiar with the situation. LVMH formally denied it exerted any kind of pressure, a company spokesman said.
The luxury industry’s biggest takeover is unraveling as LVMH moved on Wednesday to call off the $16 billion purchase of Tiffany, which countered with a lawsuit to try to keep the deal on track.
The Louis Vuitton owner said the French government requested that it delay the deal for reasons related to a U.S.-France trade dispute. Tiffany said that LVMH was trying to leverage the protests against police brutality and the Covid-19 pandemic to seek a lower price.
LVMH Backs Away From Tiffany Deal After France Orders Delay
LVMH cited a letter by Foreign Minister Jean-Yves Le Drian about the trade dispute with the U.S. as a reason to get out of the deal. One person said the billionaire personally reached out to the government to get a state of play on those talks.
Arnault initially sought support from the finance ministry, which rejected him, before going to the foreign ministry. A spokesperson for the French presidency declined to comment, while the ministry of foreign affairs didn’t return requests for comment.
The finance ministry declined to comment.
LVMH Chief Financial Officer Jean-Jacques Guiony was asked during a press conference on Wednesday if the company sought help from the government. His answer: “You must be joking. Are you seriously suggesting that we procured the letter? I don’t even want to answer that question.”
Arnault’s fortune and luxury empire have been built on decades of successful mergers and acquisitions as he amassed sought-after brands like Christian Dior and Moët & Chandon Champagne. Arnault ranks as the world’s fourth richest person even though his fortune is down by close to $20 billion this year alone.
In France, like elsewhere in Europe, business titans have close relationships with those in power. Before Emmanuel Macron’s election in 2017, the billionaire publicly backed the candidate. More recently, Arnault praised Macron’s work to improve France’s image among international investors.
The wife of Macron, Brigitte, is close to Arnault’s daughter Delphine. The former schoolteacher counts the Arnault family among her former students, according to various books about the couple. She is also often photographed wearing Louis Vuitton dresses borrowed from the collection.
— With assistance by William Horobin, Ania Nussbaum, Geraldine Amiel, and Angelina Rascouet
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