Manufacturers of watches over the past two years have made transactions on mergers and acquisitions in excess of $ 1 billion, writes RBC Daily. Most of the deals fell on Swiss suppliers of parts and mechanisms. Analysts believe that this will lead to a rise in prices for watches and the ruin of small producers.
In the spring of this year, the French company Hermes International, which produces its watches in Switzerland, bought two-thirds of the local producer of watch cases Joseph Erard, writes The Wall Street Journal (WSJ). The deal was not disclosed, but it allowed Hermes to establish stable shipments for its Arceau Le Temps Suspendu line. "We want to secure our future deliveries of strategically important components," says Hermès watch company director Luc Perramond.
Similar deals were made by the main competitors of Hermes - Richemont and LVMH. Richemont spent about 80 million euros on the purchase of the Swiss manufacturer of casings Varin-Etampage, and LVMH acquired the supplier of dials ArteCad. Another significant player, Gucci Timepieces & Jewelry, bought the manufacturer of the Fabbrica Quadranti dials. The situation on the market was exacerbated by the resolution that Swatch Group received from Swiss regulators in October, limiting the supply of key components to its competitors. Swatch is the world's largest manufacturer of watch movements and parts. It is expected that the company will continue to reduce their supplies for mechanical watches next year and completely cease by 2020. Since 2011, when they first talked about reducing the supply from Swatch, watch manufacturers made acquisitions for a total of over $ 1 billion. Most of them were just suppliers of parts. Eight out of ten general directors from the watch industry said that the absorption will continue in the next year and a half, according to a poll by Deloitte.