Swatch to buy Harry Winston’s jewellery and watch division

$1bn deal.

New Statesman
Photograph: Getty Images.

The Swiss watch manufacturer Swatch Group is planning to acquire the Canada-based Harry Winston Diamond Corporation’s jewellery and watch division for approximately $1bn to expand its presence in the jewellery market.

Swatch Group will pay $750m in cash, apart from assuming up to $250m in debt.

Under the deal, the companies will explore the possibility of setting up a joint venture that will focus on diamond polishing.

Jon Cox, head of Swiss research at Kepler Capital Markets, told the Financial Times: “Swatch has been saying for a while that they want to get into the jewellery business but have never really got off the ground, so from that perspective it makes sense. The joint venture in diamond sourcing is also positive, since Swatch has said in the past that it has had problems getting its hands on diamonds.”

In November 2012, Harry Winston agreed to purchase the Ekati diamond mine in Canada for $500m from BHP Billiton.

Robert Gannicott, chairman and chief executive of Harry Winston, said the sale represented a sound return on the Canadian company’s original investment.

“One of the main reasons that we bought Harry Winston . . . was that we wanted to have the information flow from the polished diamond end of the business to enable us to nimbly price rough diamonds,” Gannicott added.

After the closure of deal, Harry Winston will be renamed as Dominion Diamond Corporation.

Financial advisory group Rothschild advised Harry Winston on the transaction.