Swatch to Spend $1 Billion to Buy Prestigious Brand

by Christopher Freeburn | January 14, 2013 10:04 am

Swatch to Spend $1 Billion to Buy Prestigious Brand

swatch1 300x96 Swatch to Spend $1 Billion to Buy Prestigious Brand[1]Swatch Group (PINK:SWGAY[2]) announced on Monday that it will purchase the Harry Winston brand of watches and jewelry[3] for about $1 billion.

Under the terms of the deal, Swatch will pay $750 million in cash and should an additional $250 million in debt to acquire the brand from Canada-based Harry Winston Diamond Corp. (NYSE:HWD[4]), which will change its name to Dominion Diamond Corporation after the sale is completed, the Associated Press noted.

On the news, shares of Harry Winston Diamond surged more than 8% in Monday trading, rising above $15 a share, while shares of Swatch Group climbed almost 3% in over-the-counter trading.

European and Canadian regulators will have to approve the purchase.

The largest watch-maker in Switzerland, Swatch will acquire 500 employees as well as Harry Winston’s manufacturing plant in Geneva in the acquisition. Swatch employs about 29,000 workers worldwide and owns a wide array of luxury watch brands, including Breguet, Omega, Longines, Mido, Blancpain, Tiffany Watch and Tissot.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/01/swatch1.jpg
  2. SWGAY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SWGAY
  3. will purchase the Harry Winston brand of watches and jewelry: http://hosted.ap.org/dynamic/stories/E/EU_SWITZERLAND_SWATCH_HARRY_WINSTON?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-01-14-05-43-26
  4. HWD: http://studio-5.financialcontent.com/investplace/quote?Symbol=HWD

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