Swatch has bought Harry Winston's luxury jewelry division for $1 billion. Reuters

The Swatch Group, Switzerland's biggest watch maker, has acquired Canadian watch and jewelry brand Harry Winston in a $1 billion deal, reps from both companies said, Fox News reported.

Swatch (UHR) will acquire the Harry Winston Diamond Corp.’s (NYSE: HWD) luxury retail division for $750 million and assume $250,000 in debt, the companies said on Monday in a joint statement.

With the completion of the deal, Harry Winston will become solely a diamond mining and distribution company. The Toronto-based company will operate under the name Dominion Diamond Corporation, Forbes said.

"At the time that we purchased the Harry Winston brand, resource investment opportunities for diamonds were rare and expensive following the euphoria of the Canadian diamond discoveries, and the involvement of the large international mining companies," Harry Winston Diamond Corp.'s chairman, Robert Gannicott, said in a statement.

"Today there is a range of diamond resource opportunities while the value of heritage luxury brands has increased dramatically," he added. "This transaction represents a sound return on our original investment."

Swatch will also acquire the Harry Winston production company in Geneva as well as more than 500 global employees. The Swiss company said that it is seeking to build its luxury division in order to have an edge against competitors.

Swatch Group's chairwoman, Nayla Hayek, said that Harry Winton’s already-established jewelry division "brilliantly complements the prestige segment" associated with the Swiss company's own brand.

“We are proud and happy to welcome Harry Winston to the Swatch Group family — diamonds are still a girl’s best friend,” Hayek added.

The deal is still up for approval by various regulatory authorities.