Acquisition of Luxury Jewellery House Faberge by Mining Company Gemfields Valued at $142M

Online, November 23, 2012 (Newswire.com) - The announcement of a planned merger by two major players in the gemstone industry has gotten the attention of jewellery connoisseurs around the world. Mining company Gemfields will buy the renowned Faberge house at an estimated value of $142M worth of shares, which would effectively salvage the long-beleaguered jewellery-making firm and increase the gemstone producer's visibility in the industry.

214 million shares will be issued by Gemstone as part of the deal, and this will be paid to Faberge shareholders in equivalence to their holdings with the firm. Chief executive Ian Harebottle of Gemfields has stated, "We have the opportunity to acquire what is certainly, I believe, a brand with exceptional heritage...having been the brand that has provided jewellery to kings and queens, princes, tsars, and leaders of the world over many, many years".

Indeed, the House of Faberge established its historical reputation due to their patronage by the Russian Tsars in Imperialist Russia in the 1800s. The company, which was founded by Gustav Faberge, became famous with their creation of the iconic Faberge eggs commissioned by the Imperial Russian family-a series of exquisitely made Easter eggs fashioned out of expensive materials such as porcelain, gold, pearls, and various precious gemstones.

But over the passing decades, the company has experienced financial troubles since the fall of the Russian Empire. Faberge underwent previous takeovers from Unilever and the Pallinghurst Group before Gemfields assumed financial control over the business. Gemfields, mainly focusing on mining emeralds, has been looking to expand their marketing range by also sourcing out rubies and sapphires. The mining firm also upholds its commitment to acquire the priceless stones by ethical means.

Harebottle has expressed his belief that the partnership of the two companies will bring a wonderful symbiosis, given that Gemfields' output from their gem mines will supply the raw materials needed to create the luxury pieces Faberge is known for.

Katharina Flohr, creative and managing director of the Russian-founded firm, shares Harebottle's sentiment. She commented, "Both businesses are fortunate to share the same vision and to recognise the exciting long-term opportunity that exists within the combination of the coloured gemstone and luxury goods markets. Gemfields' leading market position is in part due to its ability to supply ethically produced coloured gemstones on a large scale but is also due to its extensive marketing initiatives, both of which are certain to be developed further by Faberge, to the benefit of both companies and the sector as a whole".

With the deal set in motion, Faberge ultimately plans to open two new stores every year over the next decade in key luxury markets. It currently sells their jewellery through retail concessions and five boutiques in London, Geneva, Hong Kong, and New York.

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