TORONTO – Harry Winston Diamond Corp. has announced a deal to sell its luxury brand diamond jewelry and watch division to The Swatch Group for $1 billion. Swatch will pay US$750 million and assume up to US$250 of pro forma net debt.
Harry Winston chairman and CEO 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. Today there is a range of diamond resource opportunities while the value of heritage luxury brands has increased dramatically. This transaction represents a sound return on our original investment. It will leave us well equipped to realize upstream opportunities in an environment where cash has become a strategic resource while preserving and expanding our relationship with the downstream diamond business."
Harry Winston is a 40% partner in the Diavik diamond mine at Lac des Gras, NT, with 60% owner Rio Tinto is the operator. Aber, the Canadian company involved in the development of the Diavik mine, bought 51% of Harry Winston Inc. for US$85 million in 2004. In October 2006, Aber bought out its Harry Winston partners and adopted the more famous name. Harry Winston also agreed to buy BHP Billiton's 80% interest in the Canada's first diamond mine, Ekati.
Without the Harry Winston retail connection, Harry Winston Diamond p lans to rename itself Dominion Diamond Corp.