The world’s largest luxury group LVMH is being sued by Tiffany after it said it was pulling out of its agreed $16.6bn takeover of the jeweller.

The world’s largest-ever luxury deal was thrown into doubt today after the French luxury conglomerate said it could not complete the deal and the US-based jeweller hit back with a lawsuit to force the agreement through. 

Since the pandemic struck in March, LVMH chair and chief executive Bernard Arnault has reportedly sought to bring Tiffany back to the table to renegotiate the deal that was agreed on last November. 

Yesterday, the luxury group’s lawyers disclosed to Tiffany a letter it said it had received from the French government, which called for the deal to be delayed due to the ongoing trade war between the US and France, according to the Financial Times

LVMH said due to “initial legal analysis prepared by the board and LVMH” and the request from the French government, “as it stands, the group LVMH will therefore not be able to complete the acquisition of Tiffany & Co”.

In response, Tiffany launched legal action, claiming LVMH had breached its transaction agreement by not informing it of the letter immediately and of using delaying tactics to renegotiate the deal. 

In its lawsuit, Tiffany said: “LVMH’s recent actions shed light on the true motives behind LVMH’s contrived delays and missed deadlines. It is now unmistakably clear that LVMH has been running out the clock for the last five months in an effort to get to the initial August 24, 2020 ‘drop-dead’ date [as] part of an entirely improper effort to strong-arm Tiffany into agreeing to reduce the merger price.”

Tiffany chair Roger Farah said: “We regret having to take this action but LVMH has left us no choice but to commence litigation to protect our company and our shareholders.”