Harry Winston sells luxury brand segment to watchmaker Swatch
TORONTO (miningweekly.com) – Diamond miner and jeweller Harry Winston Diamond on Monday announced it had agreed to sell its luxury goods segment to Swiss watchmaker The Swatch Group in a $750-million deal which would allow Harry Winston to focus on its mining activities.
Under terms of the deal Swatch would also assume $250-million of pro forma net debt.
Harry Winston chairperson and CEO Robert Gannicott said the transaction represented a sound return on the company’s original investment.
“It will leave us well equipped to realise upstream opportunities in an environment where cash has become a strategic resource while preserving and expanding our relationship with the downstream diamond business,” Gannicott said in a statement.
Under the terms of the sale agreement, the company had agreed to trade under a new name – Dominion Diamond – as from the close of the transaction.
Harry Winston expected to retain an ongoing relationship with Swatch, one of the world's largest buyers of polished diamonds, which would see them sourcing polished diamonds for Swatch.
The two companies will also explore the opportunities for a joint diamond-polishing venture, which would bring together the manufacturing and diamond expertise of the two companies.
Rothschild advised Harry Winston on the transaction and provided a fairness opinion. The transaction is subject to receipt of a variety of regulatory approvals and other customary closing conditions.
Harry Winston’s Toronto-listed shares climbed 5.61% on news of the transaction, to trade at C$15.07 apiece on Monday.
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