LVMH and Tiffany & Co have agreed to new terms and a slightly reduced price for the French luxury group’s takeover of the New York jeweller.

The two parties have also agreed to set aside their respective suits in the Delaware Chancery Court and work towards what they are now describing as a “merger agreement”.

LVMH agreed to pay US$16.2 billion to take full control of Tiffany in a deal struck late last year, well before Covid-19 changed the shape of the global luxury industry. Doubts about the completion of the deal emerged in late May as retail sales declined and LVMH tried to cancel the deal in early September, sparking a court suit from Tiffany and a counter suit by LVMH.

Today, however, LVMH issued a statement saying it ahead agreed to modify the initial agreement to reflect a new price of $131.50 per share, $3.50 less than the original price. Other key terms remain unchanged.

The new price saves LVMH around $430 million, or about 2.65 per cent.

“We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger,” said Roger N Farah, chairman of Tiffany’s board, in LVMH’s statement. “The board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing.”

Bernard Arnault, president and CEO at LVMH, described the new agreement as “balanced” and clearing the way for the board to resume work on the acquisition and resume discussions with Tiffany’s management on the integration details.

“We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter.”

The boards of both companies have approved the new terms and LVMH says requisite regulatory approvals have all been obtained.

The merger is now back on track to be completed early next year, subject to Tiffany shareholder approval and customary closing conditions.