(Bloomberg) -- LVMH agreed to buy Tiffany & Co. at a reduced price of almost $16 billion, preserving the luxury industry’s biggest takeover and avoiding a courtroom battle over an earlier deal that soured.The compromise ends a yearlong saga that’s been characterized by accusations of bad faith, French government intervention and lawsuits. Both sides were due to meet in a Delaware court in January, after the Louis Vuitton owner walked away from their original deal and Tiffany sued to keep it on track.Adding Tiffany at a lower price reinforces LVMH Chairman Bernard Arnault’s image as a hard-nosed bargainer, even though the savings are a small fraction of his company’s $240 billion market value. The deal gives LVMH a major boost in the global jewelry market, adding a famous brand that can compete with Cartier owner Richemont.Under the new agreement, the French owner of brands like Dior fashions and Hennessy cognac will pay $131.50 a share, down from the original price of $135, according to a statement Thursday.LVMH rose as much as 0.6% in Paris, after Tiffany closed at $129.95 on Wednesday in New York.The reduction of about $425 million from the earlier terms follows Tiffany’s payment of dividends and management bonuses that angered LVMH. The payouts were made after the companies struck their first agreement in late 2019 and as the Covid-19 pandemic caused a slump in luxury sales.Under the modified terms, Tiffany will pay its regular dividend of 58 cents per share in November, the companies said. The companies agreed to set aside their lawsuits.The new accord was fueled by improving results at both companies. Some normalcy has returned to major luxury markets such as China, even as new coronavirus lockdowns spread across Europe.Later ClosingThe new agreement is expected to close in early 2021, according to the statement. The original closing date was Nov. 24.Tiffany and LVMH executives were all smiles last year when the jeweler hosted Arnault at its New York flagship. France’s wealthiest man spoke of the jeweler as an American icon and expressed his “intense respect and admiration” for the 183-year-old business.Their relationship soon soured as the pandemic halted tourism, shut down stores and stifled luxury spending. In September, LVMH said it couldn’t go through with the deal, citing a request from the French government amid a trade dispute with the U.S.A Delaware judge last month urged both sides to talk and reach an agreement. At first, the companies were reluctant to return to the negotiating table, but they changed their tune as the November deadline for the original transaction approached.(Updates with dividend in seventh paragraph and other details)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.