Chow Tai Fook Jewellery Group Limited ("Chow Tai Fook" or the "Company"; collectively with its subsidiaries, the "Group"; HKEx Stock Code: 1929), the world's largest pure-play jeweller by market capitalisation with 85 years of heritage, and Hearts On Fire Company LLC ("Hearts On Fire"), a luxury branded diamond company offering premium bridal and fashion jewellery products, jointly announced today that they have entered into a conditional acquisition agreement whereby Chow Tai Fook will acquire the entire stake of Hearts On Fire for a consideration of US$150 million (approximately HK$1,170 million) on a cash-free and debt-free basis. The proposed acquisition will be fully funded by Chow Tai Fook's internal resources.
Chow Tai Fook Chairman Dr Henry Cheng said, "We welcome Hearts On Fire as our valuable partner that shares the same vision for high quality and innovative products. The proposed acquisition is a strategic move to complement our product portfolio with an exclusive premium diamond jewellery line and to raise our profile as world-class diamond expert in the jewellery industry."
While Chow Tai Fook will remain focused on its business in the Greater China region, Hearts On Fire will be run as a standalone business within the Group under the continued leadership of CEO and Chairman, Glenn Rothman, and the Hearts On Fire senior management team. In addition to its existing sales network, Hearts On Fire's products are expected to be introduced to the Mainland China, Hong Kong and Macau markets through Chow Tai Fook's extensive retail network employing the Hearts On Fire "shop-in-shop" and "counter-in-shop" models within six months upon completion of the proposed acquisition.
"Hearts On Fire is a best-selling luxury diamond brand with strong consumer awareness, and its product offerings are ideal additions to our existing portfolio. The acquisition is in line with the Group's strategy to optimise product mix and promote higher value products to match the spending profiles of consumers. Given its proven track record not only in the western markets but also in Taiwan, the Group is confident that the Hearts On Fire products will be well received in our major markets, including Mainland China, Hong Kong and Macau, where diamond jewellery is increasingly popular," Kent Wong, Managing Director of Chow Tai Fook added.
The exclusive premium brand boasts its proprietary cutting and polishing technology, master craftsmanship and design excellence and is highly acclaimed for producing The World's Most Perfectly Cut Diamond®. The brand has a global presence at more than 500 locations in 31 countries, with U.S.A. being its largest market.
"Chow Tai Fook brings to the Hearts On Fire retail distribution channel powerful financial resources, high-tech manufacturing capacity, and their innovative culture of creative talent. These "best-in-industry" resources will provide Hearts On Fire the support and opportunity to expand exponentially, as we enter new markets, leveraging Chow Tai Fook's leadership in the jewellery industry and its extensive retail network in Greater China. This is an unprecedented opportunity to grow the Hearts On Fire brand and reach millions of new customers," said Glenn Rothman.
With minimal operational overlap between Chow Tai Fook and Hearts On Fire, a smooth integration is expected within a relatively short time.