PARIS (Reuters) – French Finance Minister Bruno Le Maire said Foreign Minister Jean-Yves Le Drian was within his rights to intervene in LVMH’s plans to back out of a takeover of U.S. jeweller Tiffany.
“Mr Le Drian took the decision which appeared to him to be the right one,” Le Maire told France 2 television on Monday, adding that Le Drian was working to protect French interests in his intervention.
Last week, LVMH said its board had received a letter from the foreign ministry asking it to delay the acquisition of Tiffany to beyond Jan. 6, 2021, given the threat of additional U.S. tariffs against French products.
Both Tiffany and LVMH have started legal action over the state of the deal.
Tiffany sued LVMH after the French company said it could not complete the $16 billion takeover of Tiffany due to the French government request.
LVMH in turn said it said would counter-sue Tiffany, accusing it of mismanagement during the coronavirus crisis.
LVMH shares were flat by 0840 GMT, while Tiffany shares closed 0.5% lower on Friday.
“Hiding behind the French government is just an excuse for LVMH,” said Ion-Marc Valahu, a fund manager at Geneva-based firm Clairinvest.
“The reality is that they’re seeing what’s happening with COVID, and the fact that no-one is going out shopping, and they may be looking to see if they can get Tiffany at a lower price,” he said.
Reporting by Sudip Kar-Gupta and Jean-Stephane Brosse; Editing by Christian Schmollinger and Louise Heavens