LV’s parent company has ended its bid for Tiffany’s, the largest acquisition in the history of the luxury goods industry.

LVMH’s acquisition of Tiffany failed. On the evening of September 9th,media reported that LVMH, the parent company of the Louis Vuitton brand and the world’s largest luxury goods group, had announced the termination of its $16.2bn deal to buy Tiffany, the US jewellery brand. The deal could have been the biggest acquisition in the history of the luxury goods industry.

LV's parent company has ended its bid for Tiffany's, the largest acquisition in the history of the luxury goods industry.

In a public statement, LVMH said it had received a letter from the French Foreign Ministry asking for the timing of the acquisition of Tiffany to be postponed until January 6 next year in response to the US government’s threat to tax French goods. Meanwhile, LVMH Group said it had received a request from Tiffany to extend the deadline for the acquisition from November 20 to December 31.

For these reasons, LVMH Group said it would not be able to complete its acquisition of Tiffany as it stands after a board decision.

LVMH shares edged down 0.2 percent to close at $94.95 on Friday on the news.

The Financial Times points out that this would have been the biggest deal ever made by the luxury goods industry, but the business outlook is now very different as a result of the new crown outbreak. The outbreak hit the luxury retail industry hard, with figures showing same-store sales at Tiffany’s down 44 per cent.

The context of the outbreak has also led LVMH Group to renegotiate the purchase price. Bernard Arnault, chief executive of LVMH Group, has been trying to find ways to pressure Tiffany to lower the $135-a-share deal price previously agreed, Reuters reported, citing people familiar with the matter. LVMH and Tiffany have agreed to postpone the initial takeover deadline from August 24 to November 24, but relations have deteriorated.

In June, Tiffany threatened to sue LVMH If it wanted to renegot the terms of the acquisition.

On September 9th the Financial Times quoted people familiar with the matter as saying that Tiffany had accused LVMH Group of deliberately delaying the antitrust approval process and attempting to force Tiffany to restart takeover talks through other delays. On Wednesday, Tiffany filed a lawsuit against LVMH Group in U.S. District Court in Delaware.