Sept. 29 (UPI) -- The owner of luxury retailer Louis Vuitton has filed a countersuit against Tiffany & Co. in an effort to abandon a $16 billion acquisition agreement.
France-based LVMH Moet Hennessy said earlier this month it would drop the deal, citing "a succession of events which undermine the acquisition" -- including an order from French foreign minister Jean-Yves Le Drian to defer the transaction due to taxes threats by the United States.
Tiffany had requested to extend the "outside date" of the merger from November to January and ultimately sued LVMH in Delaware in a bid to force the acquisition. Tiffany argued that the French government request for a delay was unlawful.
LVMH argues that it should be allowed to kill the agreement because Tiffany hasn't met its provisions.
"LVMH continues to have full confidence in its position that the conditions necessary to close the acquisition of Tiffany have not been met and that the spurious arguments put forward by Tiffany are completely unfounded," LVMH said in a statement.
In its countersuit, LVMH acknowledged several factors in walking away from the deal, including the COVID-19 pandemic and complaints about Tiffany mismanagement during negotiations, like burning through cash and giving exorbitant dividends to shareholders.
"No other luxury company in the world did so during this crisis," the company said. "There are many examples of mismanagement detailed in the filing, including slashing capital and marketing investments and taking on additional debt."
LVMH said it had met all obligations in the deal, including clearing regulatory hurdles. The company said it expects approval for its plan from the European Commission next month.