Shares of the American jewellery giant Tiffany (NYSE: TIF) fell nearly 7% on Wednesday after the French luxury fashion giant LVMH (EPA: MC) pulled out of its $16.2 billion acquisition deal.
The deal, which would have been the largest-ever in this industry, was scrapped after the Louis Vitton owner opted to get out of the contract. According to the company, it had a change until November 24 to pull out.
Tiffany reportedly asked for an extension of the deadline, similar to the French government, which instructed LVHM to extend the deadline to 2021 and take into consideration the U.S. threat of taxes on French products.
In response, Tiffany filed a lawsuit to force LVMH to complete a deal.
“We believe that LVMH will seek to use any available means in an attempt to avoid closing the transaction on the agreed terms,” said Tiffany chairman Roger Farah.
Tiffany share price closed nearly 7% in the red after plunging more than 10% earlier.