Following is the full text of the press release:

Anglo American plc and CHL Holdings Limited (“CHL”) announce their agreement for Anglo American to acquire an incremental interest in De Beers, increasing Anglo American’s current 45 percent shareholding in the world’s leading diamond company to up to 85 percent.

 

Anglo American has entered into an agreement with CHL and Centhold International Limited (“CIL”), together representing the Oppenheimer family interests (“CHL Group”), to acquire their 40 percent interest in DB Investments and De Beers sa (“De Beers”) for a total cash consideration of US$5.1 billion, subject to adjustment as provided for in the agreement. Under the terms of the existing shareholders’ agreement between Anglo American, CHL and the Government of the Republic of Botswana (GRB), the GRB has pre-emption rights in respect of the CHL Group’s interest in De Beers, enabling it to participate in the transaction and to increase its interest in De Beers, on a pro rata basis, to up to 25 percent. In the event that the GRB exercises its preemption rights in full, Anglo American, under the proposed transaction, would acquire an incremental 30 percent interest in De Beers, taking its total interest to 75 percent, and the consideration payable by Anglo American to the CHL Group would be reduced proportionately.

 

Anglo American has a deep knowledge and understanding of De Beers and an appreciation for the unique nature of diamonds, having been the company’s largest shareholder since De Beers became a private company in 2001 and as a longstanding shareholder in De Beers prior to that. De Beers’ geographically diverse portfolio comprises large scale, low cost mining assets with proven distribution, sales and marketing capabilities and further potential from its leading pipeline of greenfield and brownfield projects and an expanding consumer-facing footprint. Anglo American is well positioned to enhance the value of De Beers through its expertise and scale in such areas as technical, supply chain and financial management functions as part of a simplified and more integrated ownership structure.

 

Cynthia Carroll, Chief Executive of Anglo American, said: “This transaction is a unique opportunity for Anglo American to consolidate control of the world’s leading diamond company – De Beers. Today’s announcement marks our commitment to an industry with highly attractive long term supply and demand fundamentals. Underpinned by the security of supply offered by a new 10-year sales agreement with our partner, the Government of the Republic of Botswana, this forms a compelling proposition. De Beers’ management team has led the business successfully through the financial crisis and into a stable position and it is now well placed for the future, with improving performance throughout 2011. I believe that the benefits brought by Anglo American’s scale, technical, operational and exploration expertise and financial resources, combined with the unquestionable leadership of De Beers’ business and iconic brand will enable De Beers to enhance its position across the diamond pipeline and capture the potential presented by a rapidly evolving diamond market.”

 

Nicky Oppenheimer, representing the Oppenheimer family interests, said: “This has been a momentous and difficult decision as my family has been in the diamond industry for more than 100 years and part of De Beers for over 80 years. After careful and deliberate consideration of the offer, and what is in the best interests of the family, we unanimously agreed to accept Anglo American’s offer. Anglo American is the natural home for our stake as they have been major shareholders in De Beers since 1926 and have a deep knowledge of the diamond business. I am certain that Anglo American will provide strong support to Philippe Mellier and the De Beers management team.”

 

The Minister of Minerals, Energy, and Water Resources, Dr. Ponatshego H Kedikilwe, on behalf of the Republic of Botswana said: “The diamond industry is a major contributor to our economy in Botswana. We are grateful to the Oppenheimer family for their vision and contribution to the diamond industry and to Botswana and we will proudly take forward that legacy with Anglo American. We look forward to building on the excellent relationship we have with Anglo American, both through our ownership of De Beers and through the Debswana joint venture.”

 

Sir John Parker, Chairman of Anglo American, added: “The purchase of an incremental interest in De Beers is fully aligned with the Board’s strategic priorities. The value created in De Beers and the diamond industry by the Oppenheimer family over the past century has been a remarkable achievement. We look forward to increasing our involvement in the business and building strong links and relationships with De Beers’ Sightholders and partners.”

 

Safety and sustainable development are key value drivers for Anglo American, with its pioneering health and enterprise development programmes in South Africa, for example, widely recognised by industry and government. Anglo American looks forward to working more closely with governments through De Beers’ joint venture partnerships in Botswana and Namibia and with De Beers’ BEE partners in South Africa to share expertise and tailor programmes to employees and the wider communities as may be appropriate.

 

The transaction is expected to be accretive to underlying earnings before depreciation and amortisation on fair value adjustments in the year of acquisition. The transaction does not alter the existing arrangements for the management of De Beers, including Mr N F Oppenheimer’s position as chairman, prior to completion. Mr P Mellier will continue as CEO of De Beers.

 

In view of the fact that CHL and CIL are ultimately controlled through intermediary companies by trusts of which Mr N F Oppenheimer is a potential discretionary beneficiary and Mr N F Oppenheimer has been a director of Anglo American within the last 12 months, the proposed acquisition is categorised as a related party transaction under the terms of the Listing Rules and therefore requires Anglo American shareholder approval. A circular to Anglo American shareholders convening a General Meeting of Anglo American shareholders for the purposes of seeking such approval, in accordance with the requirements of the Listing Rules, will be sent to shareholders in due course. The transaction is also subject to regulatory and government approvals and required third party consents (if any) and is expected to close in the second half of 2012.

 

Additional information:

 

This announcement is available on the Anglo American website www.angloamerican.com, together with Anglo American’s slide presentation to investors, a fact sheet on De Beers, in addition to the pre-existing information available on De Beers.

 

Anglo American is one of the world’s largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Anglo American’s portfolio of mining businesses spans bulk commodities – iron ore and manganese, metallurgical coal and thermal coal; base metals – copper and nickel; and precious metals and minerals – in which it is a global leader in both platinum and diamonds. Anglo American is committed to the highest standards of safety and responsibility across all its businesses and geographies and to making a sustainable difference in the development of the communities around its operations. The company’s mining operations and extensive pipeline of growth projects are located in southern Africa, South America, Australia, North America and Asia. www.angloamerican.com

 

De Beers, established in 1888, is the world’s leading diamond company with unrivalled expertise in the exploration, mining and marketing of diamonds. Together with its joint venture partners, De Beers operates in more than 20 countries employing more than 16,000 people, and is the world’s leading diamond producer with mining operations across Botswana, Namibia, South Africa and Canada. As at 30 June 2011, De Beers had gross assets of US$8.2 billion and reported EBITDA of US$1.2 billion for the six months to 30 June 2011. For the twelve months to 31 December 2010, De Beers reported profit before tax of US$863 million. As part of De Beers’ operating philosophy, the people of De Beers are committed to Living up to Diamonds by making a lasting contribution to the communities in which they live and work. In the countries in which De Beers has mining operations, this means carrying out profitable business, whilst at the same time helping Governments achieve their aspirations of turning natural resources into shared national wealth. De Beers encourages sustainable working to ensure long-term positive development for Africa, and returns more than US$3.0 billion to the continent every year. www.debeersgroup.com

 

The CHL group holds a 40 percent interest in De Beers (including certain shareholder loans which at 31 October 2011 amounted to US$265 million). Central Management Services Limited (“CMSL”), a fellow subsidiary of CHL, was appointed under a management contract dated January 2002 (“the Management Contract”) to assist in the appointment of directors, senior executives and management. Under the Management Contract, CMSL also contributes to the strategic development of De Beers and to general marketing initiatives and relationships with key customers and suppliers. The Management Contract will terminate automatically on completion of the transaction. The CHL group is ultimately controlled, through intermediary companies, by trusts (the “Oppenheimer Trusts”) of which Mr N F Oppenheimer is a potential discretionary beneficiary. The Oppenheimer Trusts also have an indirect interest, through E Oppenheimer & Son International Limited (“EOSIL”), in 25.2 million ordinary shares of Anglo American. In accordance with the Listing Rules, EOSIL has undertaken to procure that such shares are not voted on the resolution to be proposed at the General Meeting of Anglo American to be convened for the purposes of approving the transaction.

 

The proposed acquisition is to be implemented, subject to obtaining the required approval of Anglo American shareholders, and subject to Anglo American being reasonably satisfied with the results of a limited confirmatory due diligence exercise to be undertaken prior to the General Meeting of Anglo American shareholders in respect of De Beers’ material mining licences, and, in addition, subject to obtaining necessary regulatory and government approvals and required third party consents, by the CHL Group offering all of the shares and existing shareholder loans of the CHL Group to Anglo American and the GRB, pro rata to their existing shareholdings in De Beers, for an aggregate consideration of US$5.1 billion, subject to adjustment. Anglo American has agreed, subject to such shareholder approval and confirmatory due diligence and subject to obtaining necessary regulatory and government approvals and required third party consents, to accept such offer when made in respect of all of such interests. In the event that the GRB takes up such offer up to its pro rata entitlement, Anglo American’s acceptance will be scaled back accordingly and the interests in De Beers to be acquired by Anglo American, and the cash consideration payable by Anglo American, will be reduced accordingly, as described above.

 

The US$5.1 billion aggregate consideration payable for the CHL Group’s interest in De Beers is subject to increase by an amount equivalent to interest at a rate of 3.5 percent per annum from 4 November 2011 to closing of the transaction and decrease by reference to any dividends or loan principal or interest received by the CHL Group prior to closing. If closing of the transaction takes place more than nine months from the date of this announcement (other than by reason of CHL extending the time for satisfaction of the conditions), the consideration will be increased by US$50 million. In addition, Anglo American has agreed, in the event of a listing of De Beers in the two year period following closing of the transaction, to pay capped additional consideration to the CHL Group, equal to 20 percent (if a listing were to occur in the first such year) or 10 percent (if a listing were to occur in the second such year) of any increase in the attributable value (determined by reference to the transaction consideration and the listing price) of the De Beers equity acquired by Anglo American from the CHL Group in the transaction.

 

Anglo American has agreed to pay to CHL (or as it may direct) a break fee of US$75 million in the event that the transaction does not close.