“As a result of these elements, and knowledge of the first legal analysis led by the advisors and the LVMH teams, the Board decided to comply with the Merger Agreement signed in November 2019 which provides, in any event for a closing deadline no later than November 24th, 2020 and officially records that, as it stands, the Group LVMH will therefore not be able to complete the acquisition of Tiffany & Co,” the statement wrote.

LVMH’s acquisition of the iconic jeweller for US$16.2 billion had met with much fanfare when it was announced last November, with the luxury group’s chairman, Bernard Arnault, vowing to bestow it with “the same dedication and commitment” as the other luxury brands under its umbrella.

(Related: Louis Vuitton's Shanghai Flagship Breaks Sales Record With US$22 Million in August 2020)

Rumours that the acquisition was falling through started to emerge in the first half of 2020, however, as Tiffany & Co experienced a 36 per cent drop in sales from the prior year amidst the coronavirus pandemic.

In response to LVMH’s dismissal of the deal, Tiffany & Co has also released a statement announcing that it had filed a lawsuit in Delaware against the luxury group, requiring it to abide by the contractual obligation to complete the transaction.

Roger N. Farah, chairman of Tiffany & Co’s board, 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. Tiffany is confident it has complied with all of its obligations under the Merger Agreement and is committed to completing the transaction on the terms agreed to last year. Tiffany expects the same of LVMH.”

(Related: Tiffany & Co Reimagines the Iconic Elsa Peretti Bone Cuffs for its 50th Anniversary)

According to Tiffany & Co, “LVMH assumed all antitrust-clearance risk and all financial risk related to adverse industry trends or economic conditions” under the terms of the agreement. Additionally, “LVMH [was] required to do everything necessary to secure all required regulatory clearances as promptly as practicable.”

The jeweller further detailed that the agreement provided for an initial outside date of August 24, 2020, which both parties had agreed upon to obtain all the required clearances, but that “LVMH had not even filed for antitrust approval in three of the required jurisdictions” as of the agreed date. This prompted an extension to November 24, 2020, which LVMH says it is unable to comply by.

A ruling is expected to be obtained before November 24, 2020, with Tiffany & Co seeking to expedite the Delaware proceedings.

The dissolution of the agreement saw Tiffany & Co’s shares down by 13 per cent in pre-market trade on Wednesday, while LVMH shares were down 0.9 per cent.