European family businesses are putting their best foot forward for 2013, with Swatch making a major acquisition while Volkswagen and PPR are also eyeing deals.
Swatch has forked out $1 billion (€748.3 million) to acquire luxury US-based watchmaker brand Harry Winston, famous for its lavish use of diamonds, from the Harry Winston Diamond Corporation. The Swatch Group, controlled by the Hayek family, already counts Omega, Breguet and Tiffany & Co among the luxury brands in its stable.
Swatch has acquired the brand and all its jewellery and watch activities as well as its 535 employees and production facilities in Geneva. It has not acquired Harry Winston’s mining divisions.
The acquisition itself was worth $750 million, with a further $250 million spent to service Harry Winston’s debt. Swatch chairwoman Nayla Hayek said in a statement: “We are proud and happy to welcome Harry Winston to the Swatch Group family – diamonds are still a girl’s best friend.”
German carmaker Volkswagen, controlled by the Piech family, is a step closer to taking full control of heavy goods vehicle manufacturer Man. Volkswagon is due to begin talks with the Man board to conclude a deal know as a domination and profit and loss transfer agreement, under which Man’s future profits or losses would be transferred to Volkswagen.
Volkswagen, which currently holds 75% of Man's voting rights, said in a statement that it has always intended to integrate the smaller company into the Volkswagen Group. According to a spokesperson for the group, Volkswagen will make a bid for the remaining shares of Man during the negotiations. The date of the talks has not yet been agreed.
Under the terms of the agreement Volkswagen would have full control of Man, but the heavy good manufacturer would retain its name and continue with its current businesses activities.
If the transfer is agreed, Man will join other big brand names in the Volkswagen group, including Audi, Skoda and Porsche.
Elsewhere in Europe, PPR – controlled by the Pinault family – has added to its portfolio of luxury brands by finalising an agreement to acquire a 51% stake in fashion house Christopher Kane. The deal has been in negotiations for the past year and Christopher Kane joins famous British fashion brands Stella McCartney and Alexander McQueen in the PPR Group.
Francois-Henri Pinault, chairman and chief executive, said: “I am delighted that Christopher Kane is joining PPR’s portfolio of luxury brands and working with us to further develop his business as a global luxury brand.”
PPR has also continued with its programme of divestments in order to transform itself into what it describes as a “coherent ensemble” of luxury, sport and lifestyle brands.
It has entered into negotiations with Alpha Private Equity Fund 6 for the sale of 100% of the shares of children’s brands Cyrillus and Vertbaudet, which are managed through PRR’s subsidiary Redcats.
The sale, worth €119 million, is due to be concluded in the coming months.