French luxury goods group LVMH's $16.2 billion (13 billion pounds) takeover of Tiffany & Co is becoming uncertain as the jeweler is grappling with a deteriorating situation in the US market brought on by a global COVID-19 pandemic and severe social unrest. It was reported in fashion trade publication WWD on June 02, 2020.
Tiffany's shares had plunged down by nearly 9 percent after the news broke out.
LVMH's board had called a meeting in Paris on June 02, 2020 night to discuss the matter, WWD had reported.
LVMH's board is concerned about the COVID-19 pandemic and protests linked to the death of George Floyd at the hands of Minneapolis police.
The company's board was also skeptical about Tiffany's ability to cover all its debt covenants at the end of the transaction, which was expected to be concluded mid-year, WWD reported.
Tiffany had not immediately responded to a request for comment and LVMH had declined to comment altogether.
Louis Vuitton owner LVMH had agreed in November 2019, to buy Tiffany for $16.2 billion in its biggest acquisition ever. The $135 per-share cash deal was likely to boost LVMH's smallest business, the jewelry and watch division that is already home to Bulgari and Tag Heuer, help it expand in one of the fastest-growing industry sections and broaden its US presence.
The New York-based Tiffany was founded in 1837 and is known for its signature robin's egg blue boxes.
Tiffany will have further challenges to overcome as spending patterns shift and international tourism continues to nosedive due to trade tensions between China and America and the novel coronavirus outbreak, which has forced nonessential retailers to shut stores globally.