Anglo Takeover Bid Puts De Beers in Firing Line
April 25, 24
(IDEX Online) - Anglo American is facing a share-swap takeover bid from rival BHP that would almost certainly result in the sale of De Beers.
BHP, the world's largest mining company by market capitalization, has made what Anglo describes as "an unsolicited, non-binding and highly conditional combination proposal". Under UK takeover rules it has until 22 May to make a firm offer or withdraw.
News of the takeover bid, valued at $39bn, follows widespread speculation about Anglo's future. Its valuation has plunged from $55bn to $24bn in two years, profits for 2023 fell by 94 per cent, it cut 3,700 jobs in its platinum division in February, and it has written down the value of De Beers by $1.6bn.
Anglo has previously said it was keeping an eye on the De Beers balance sheet, but wasn't actively seeking to sell it off.
BHP, on the other hand, quit the diamond business in 2013, when it sold Ekati, Canada's first diamond mine, to Dominion Diamond, so that it could focus on its core activities, namely Iron ore, copper, coal for steelmaking, nickel and potash.
Market analysts believe there is little chance that BHP, which has its global HQ in Melbourne, Australia, would hold onto De Beers if the takeover went ahead. BHP's primary interest is in copper, one of the most sought-after metals for the clean energy transition.
De Beers Group acknowledged that the news would be "unsettling" in a message to its employees. "But it is vital that we all remain focused on our jobs," it said.
The company urged all staff to refrain from discussing it with external stakeholders or commenting on social media.
Earlier this week, Anglo announced a 23 per cent drop in De Beers' first quarter output, and lowered its production forecast for the year by 10 per cent to between 26m and 29m carats.
In a statement yesterday (24 April), Anglo said: "The proposal comprises an all-share offer for Anglo American by BHP and would be preceded by separate demergers by Anglo American of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders.
"The two parts of the proposal would be inter-conditional. The board is currently reviewing this proposal with its advisers.
"There can be no certainty that any offer will be made nor as to the terms on which any such offer might be made. Pending any further announcements Anglo American shareholders should take no action. A further announcement will be made as and when appropriate."
Pic shows Anglo American's London headquarters.