Canadian diamond firm Harry Winston Diamond Corp. (HWD: Quote, HW.TO) on Monday said it agreed to sell its luxury brand diamond jewelry and timepiece division, Harry Winston Inc., to Swiss watch maker Swatch Group Ltd. (SWGNF.PK,SWGAF.PK). The consideration includes $750 million plus their assumption of up to $250 million of pro forma net debt. The sale does not include the mining activities of Harry Winston Diamond.
Following the sale of its Harry Winston brand, Harry Winston Diamond has agreed to trade under a new name, Dominion Diamond Corp., when the transaction is complete.
The company said the sale will leave it well equipped to realize upstream opportunities in an environment where cash has become a strategic resource. It could also preserve and expand relationship with the downstream diamond business.
The deal is subject to receipt of a variety of regulatory approvals and other customary closing conditions. The selling unit employes 535 people and has production company in Geneva, Switzerland.
Harry Winston Chairman and Chief Executive Officer, Robert Gannicott said, “At the time that we purchased the Harry Winston brand, resource investment opportunities for diamonds were rare and expensive following the euphoria of the Canadian diamond discoveries, and the involvement of the large international mining companies. The Harry Winston brand was competitively priced compared with its peers and we could bring diamond expertise and strategic connections to enhance value. … This transaction represents a sound return on our original investment.”
Harry Winston Diamond noted that it will retain an ongoing relationship with Swatch, a buyer of polished diamonds, in sourcing polished diamonds for them. Both companies have also explored the opportunities for a joint diamond polishing venture, bringing together their manufacturing and diamond expertise.
Rothschild advised Harry Winston Diamond on the transaction and provided a fairness opinion.Harry Winston Diamond shares closed Friday’s regular trading session at $14.46, up $0.22 or 1.54 percent.
To receive FREE breaking news email alerts for Harry Winston Diamond Corp. and others in your portfolio
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com