EU Clears De Beers - LVMH Venture, Has Reservations Over SOC

The De Beers Group (De Beers) and LVMH Moet Hennessy - Louis Vuitton (LVMH) announced in a press release published today that they are pleased that the European Commission has given its green light to their planned jewelry retailing venture.

Saying that this decision was the result of "a constructive dialogue with the [European Union] Commission," De Beers and LVMH stated that they look forward "to the exciting opportunities for the new, independent company as it unlocks the potential in the De Beers brand name with the benefit of LVMH's renowned expertise in developing and distributing luxury brands”.

However, while the release also stated that "De Beers Group continues ongoing dialogue on Supplier of Choice, ' it admitted that today, the EU Commission had issued a Statement of Objections with regard to the examination of De Beers' Supplier of Choice program.

"As the Commission says, the initiative was voluntarily notified to the Commission for its review. The Statement of Objections will be helpful to the review process in identifying the issues that the Commission would like De Beers to address. We will be responding positively to the issues raised,' the release concluded.

Since the EU's denial last month of a merger between the electronics giants General Electric and Honeywell, industry commentators have been increasingly doubtful about the SOC's program chance to pass the Commission.

"I wouldn't give up on De Beers yet," a commentator said. "It's a strong company with a lot of clout. In the end, SOC will pass the bar, too”.