UPDATE 5-Swatch buys "diamond king" Harry Winston's luxury arm

Mon Jan 14, 2013 11:06am EST
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* Enterprise value of $1 billion

* Harry Winston mining arm renamed Dominion Diamond Corporation

* Swatch, Harry Winston shares rise

By Silke Koltrowitz and Clara Ferreira-Marques

ZURICH/LONDON, Jan 14 (Reuters) - Switzerland's Swatch has agreed to buy the high-end jewellery arm of Harry Winston in a $1 billion deal which expands the watchmaker's luxury offering and leaves the Canadian group to concentrate on its diamond mines.

The move - for $750 million in cash plus the assumption of some $250 million of debt - gives Swatch one of few available luxury jewellery brands, a marque name-checked by Marilyn Monroe and favoured on the red carpet by Elizabeth Taylor and other Hollywood stars.

It is the latest deal in a luxury sector which has seen company revenues swollen by Asia's appetite for handbags, watches and other high-end items.

Swatch Group is already the world's biggest watchmaker by sales, with 8.1 billion francs sales in 2012 thanks to brands such as Omega and its colourful Swatch plastic watches.

For Harry Winston, the deal reverses a 2004 link-up between jewellery and mining, after the acquisition of the luxury brand by the mining company that discovered what became Canada's Diavik diamond mine - now 60-percent held by Rio Tinto.   Continued...