Israel's Leviev Group Takes Control of Canadian Factory

By Rob Bates, Senior Editor -- JCK Online, 11/1/2004 2:00:00 AM

Adding yet another local diamond factory to its quickly expanding portfolio, Israel's Leviev Group has purchased Sirius Diamonds, one of the first companies to manufacture diamonds in Canada's Northwest Territories.

The deal represents the first Canadian involvement for the Leviev Group. With estimated revenue of $2.5 billion annually, the group is widely considered the second-largest diamond company in the world, next to De Beers.

Terms of the deal were not disclosed, although press reports say Leviev exceeded the threshold payment of $5 million.

The company, one of four area cutters, had filed for bankruptcy and gone into receivership after the local government demanded repayment of its $8 million loan.

Another local manufacturer, Arslanian Cutting Works, also had its loan called in by the government and was placed into interim receivership, although the government will now support the company after an investment by two new shareholders, Montreal's Basal and New York's Olympic Diamond Corp.

Sirius was probably the best known of all Canadian cutters, thanks to stories in TheNew York Times and on ABC News that touted its "polar bear" inscription. But those stories promoted the stones as alternatives to conflict diamonds, which rankled some, as it seemed as if the company was taking advantage of—and further publicizing—that sensitive issue.

It also engaged in a multi-year legal battle with the local government over whether it had the right to inscribe stones with the polar bear, a local icon.

Two years ago, the company announced that it was in negotiations to be purchased by New York manufacturer E. Schreiber, but that never took place.