Tiffany & Co sued LVMH on Wednesday after the French luxury goods giant told the US jeweler it could not complete a $16 billion deal to acquire it because of a French government request and the impact of the coronavirus outbreak. LVMH, led by billionaire Bernard Arnault, said its board had received a letter from the French foreign ministry asking it to delay the acquisition until Jan. 6, 2021, given the threat of additional US tariffs against French products. This, LVMH argued, made it impossible to meet a contractual Nov. 24 deadline to complete the acquisition, adding it was not willing to extend the agreement further. The French states intervention marked the latest twist in the attempt to combine some of the fashion worlds most high-profile luxury brands, Reuters reported. "I am sure that you will understand the need to take part in our countrys efforts to defend its national interests," Frances foreign minister, Jean-Yves Le Drian, wrote to Arnault, according to an English translation of the Aug. 31 letter that Tiffany received from LVMH and that it published on Wednesday. "The deal cannot happen. We are prohibited from closing the deal," LVMH finance chief Jean Jacques Guiony told reporters on a conference call. Bloomberg News reported, citing a source it did not identify, that Arnault asked for help from the French government to pull out of the deal with Tiffany, but Guiony said the letter was unsolicited and came as a total surprise to LVMH. A French government source said the letter had "political value" and was meant to alert LVMH to the risks of pursuing the deal just as France wrangles with the United States over trade tariffs - but it was advisory and not binding. "The French government is certainly very active in defending the French national interest. But this has meant in most cases preventing acquisition of French companies," said Luca Solca, luxury goods analyst at Bernstein. The pandemics financial fallout has made the deals price tag less attractive to LVMH. Tiffanys worldwide sales fell 29 percent to $747.1 million in the three months ended July 31, missing expectations of $772 million. Guiony on Wednesday called Tiffanys financial performance in recent months "lackluster." According to Reuters, it was not immediately clear whether LVMH was seeking to walk away from the acquisition of Tiffany, or use the hurdles facing the deal as leverage to renegotiate the price. Tiffany has so far resisted attempts to reopen price negotiations. Tiffanys shares ended trading on Wednesday down 6.4 percent at $113.96, well below the $135 per share deal price, reflecting uncertainty among investors over whether the deal will go ahead and at what price. Tiffany filed its lawsuit against LVMH in Delaware - the US state in which the New York-based company is registered - to force it to complete the deal as agreed last year. In its lawsuit, Tiffany also said it refuted LVMHs suggestion it can pull out of the deal "by claiming Tiffany has undergone a material adverse effect or breached its obligations under the Merger Agreement, or that the transaction is in some way inconsistent with its patriotic duties as a French corporation." LVMH has thus far let its deal contract with Tiffany remain in place. Tiffany is asking the Delaware court to force LVMH to comply with its obligations to close the deal or pay damages. LVMH had not responded to Tiffanys lawsuit with a court filing as of Wednesday afternoon, Reuters reported.