(MENAFN - AFP) Swatch Group, the world's leading watchmaker, said on Monday it would acquire US jeweller and watchmaker Harry Winston for up to 1.0 billion (750 million euros).
The Swiss group will pay 750 million to acquire the company and add a maximum of 250 million to take over its net debt, a statement said.
The transaction, which still needs the go-ahead from regulatory authorities, does not include the mining activities of the Harry Winston Diamond Corporation, it said.
Swatch said it would take over the Harry Winston brand and all the activities related to its jewelry and watches business, as well as 535 of its employees worldwide.
Swatch chairwoman Nayla Hayek said the deal made sense since "Harry Winston does brilliantly complement the prestige segment of the (Swatch) Group."
"Diamonds are still a girl's best friend," she added in the statement.
Harry Winston's chief executive Robert Gannicott also hailed the deal.
"The Harry Winston brand now has a new home that can provide the skills and support that it deserves to realise its true potential," he said in the statement.
Analysts were also enthusiastic about the purchase, although they said the price was steep.
"Overall the purchase makes sense, especially if (Swatch) is trying to expand in the jewelry segment of the market," Kepler analyst Jon Cox told the Dow Jones Newswires.
"In addition, Swatch is sitting on a lot of cash though the price certainly doesn't look cheap," he added.
Vontobel analyst Rene Weber agreed.
"The acquisition, which is pricey, will add 5.0 percent to Swatch sales and it should have a positive impact on earnings this year, as Swatch can pay with cash," he told the Dow Jones Newswires.
Following the news, Swatch shares opened slightly down before jumping 1.77 percent to 501.00 Swiss francs a piece in early morning trading on a Swiss market up 0.28 percent.