LVMH Moët Hennessy, the French owner of luxury retailer Louis Vuitton, said Wednesday it's abandoning a $16 billion plan to buy Tiffany & Co.

The deal to acquire Tiffany was announced last fall and was the largest luxury goods deal in history.

Citing "a succession of events which undermine the acquisition of Tiffany & Co.," LVMH said in a statement that it can't complete the deal "as it stands."

The company said French foreign minister Jean-Yves Le Drian directed it to defer the acquisition until January due to a "threat of taxes on French products by the United States."

LVMH also cited a request by Tiffany to extend the "outside date" of the merger from November to Jan. 1 as a factor in its decision.

In response, Tiffany & Co. filed suit in Delaware court Wednesday seeking an order requiring the French company "to abide by its contractual obligation under the merger agreement."

"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 & Co. Chairman Roger Farah said in a statement.

"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."

Like most businesses, the luxury retail sector has been disrupted by COVID-19 this year. Global sales are expected to decline by nearly 50% before a slow recovery.

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