|Author (Person)||Frost, Laurence|
|Series Title||European Voice|
|Series Details||Vol 7, No.19, 10.5.01, p17|
DIAMOND giant De Beers said it was confident there would be no serious opposition to its deal with LVMH to open a retail chain, as the deadline passed for submissions to the EU's investigation of the tie-up.
The Johannesburg-based mining firm claims its joint venture with the French luxury goods group has had no formal complaints from the sector.
Anti-trust officials remain tight-lipped over submissions they have received ahead of last night's deadline (9 May).
De Beers spokesman Andrew Lamont said: "I think our rivals know that brand proliferation would be good for everybody. If we can stimulate the category they all benefit."
The European Commission last month launched a full investigation after a preliminary inquiry identified competition concerns that the deal would allow the diamond miner to offer favourable terms to the proposed retailer.
But De Beers strategists claim the whole sector wants to avoid a repeat of its less-than-sparkling performance over the last 10 years.
"We've lost market share steadily to the luxury goods sector," said a company source. "What separates us from them is our lack of brands."
Under the deal, De Beers Group - soon to be renamed the Diamond Trading Company - would hold a 50% stake in the LVMH-managed retail venture selling jewellery under the De Beers name.
Under the direction of French tycoon Bernard Arnault, who owns 47% of LVMH, the group has proved its mastery in developing brand kudos in the luxury goods market.
And the company believes increased branding in diamond jewellery could boost demand and stimulate competition.
Competition Commissioner Mario Monti does not share this view. His spokeswoman said: "Through the creation of the joint venture using De Beers' prestigious name and LVMH branding skills, the deal might help De Beers reinforce its dominant position in the upstream market [in uncut diamonds]."
It is understood the EU executive has received some objections - stopping short of formal complaints - from diamond wholesale operators.
Lamont played down the significance a negative decision by the regulator would have for his firm. "It's not core to our business," he said. "We've said that from the outset."
But in a sign of the firm's readiness to compromise, he signalled that the use of the De Beers name - widely seen as the deal's strongest point - should not be taken for granted. "It's up to the joint venture - it will find a name for itself," he said. "We'll do what the Commission requires to satisfy their concerns."
Diamond giant De Beers said it was confident there would be no serious opposition to its deal with LVMH to open a retail chain, as the deadline passed for submissions to the EU's investigation of the tie-up.
|Subject Categories||Internal Markets|