In one of the more unusual corporate marriages, a firm known for wristwatches and jewels has bought a private bank in the tiny European state.

Switzerland’s Valartis Group is divesting its Liechtenstein-based private bank to a Hong Kong-listed watch and jewellery business for SFr77.7 million ($79.7 million), enabling the Valartis entities to slash debt. The unusual deal marries two differing parts of the luxury goods and services industry around the world.

Valartis Bank (Liechtenstein) is being sold to Citychamp Watch & Jewellery Group, Hong Kong. Valartis Finance Holding in Liechtenstein holds 70 per cent of the capital and 89 per cent of the votes in the Liechtenstein-based entity. The transaction is subject to regulatory approval. The deal is expected to be completed in the second quarter of this year.

The agreement, if concluded, will put together a private bank located in the European micro-state and a firm renowned for watch brands such as Corum, Rotary and Drefuss & Co. Such a transaction also suggests the Hong Kong firm is seeking to broaden out its current business offerings with the added benefit of getting access to the offshore financial base of Liechtenstein.

The agreed sales price of 70 per cent of Valartis Bank (Liechtenstein comes at a total of SFr77.7 million, subject to possible changes in line with the share purchase agreement, Valartis said in a statement yesterday. From this amount and at closing of the sale, Valartis Finance Holding will repay outstanding credit liabilities, including interest and credit costs, at SFr43.2 million, to Valartis Bank (Liechtenstein).

The remaining purchase price will be used to further cut debt and deal with the liquidity requirements of the Valartis group, it said.

“With the successful closing of the sales of the group’s two private banks in Austria and Liechtenstein, the divestments required for the recovery of Valartis Group AG and Valartis Finance Holding AG will have been achieved,” the statement continued. “The Board of Directors of Valartis Group AG and Valartis Finance Holding AG will continue to work towards the swift implementation of the recovery plans with a view to terminating the deferment of bankruptcy in Liechtenstein and the moratorium in Switzerland as soon as possible and to fully recover by the end of the process.”

The statement said Citychamp Watch & Jewellery Group plans to keep existing managers and employees.

Citychamp has been listed on the Hong Kong Stock Exchange since 1991.

“The acquisition of Valartis Bank (Liechtenstein) AG will help us achieve our vision to diversify our business segments into banking investment advisory and fund management services,” Hon Kwok Lung, Citychamp Watch and Jewellery Group chairman, said.