Tiffany & Co. has sold its 8 million shares of Aber Diamond Corp. and the companies have ended their agreement in which the New York-based retailer purchased diamonds from the Diavik Diamond Mine at a discount.
Tiffany sold its 13.9% holding in Aber, based in Toronto, in a brokered deal led by Merrill Lynch to several financial institutions. Tiffany said the sale will generate $268 million in proceeds and add $194 million to its fourth-quarter pretax earnings.
Tiffany purchased its share position from Aber in 1999 for $71 million. At the same time, Tiffany entered into a diamond purchase agreement with Aber to purchase a minimum of $50 million in diamonds annually for 10 years at a discounted rate, subject to Tiffany’s quality standards, from the Diavik Diamond Mine. Aber owns a 40% share in the mine, which is located in Canada’s Northwest Territories.
Aber said it will now sell its entire 40% share of the diamond production from Diavik at full market prices.