Luxury Companies Could Bid for De Beers
April 30, 24
(IDEX Online) - Speculation is mounting over the future of loss-making diamond giant De Beers, as its parent company Anglo American faces a takeover bid from its bigger rival BHP.
Luxury goods companies such as LVMH, Hermes or Richemont could ultimately end up owning the company that once enjoyed a 90 per cent monopoly on gem quality diamonds, according to financial website The Business Times.
Or it could go to a commodity trading or mining company such as Swiss-based Glencore, which had a 2023 revenue of $218bn.
Either way, it's still possible Anglo could still retain control of the company in conjunction with the Botswana government, which holds a 15 per cent stake.
De Beers has cut production - down 23 per cent in Q1 - as luxury spending slips and lab-grown diamond alternatives begin to erode its market share.
Anglo had reportedly been seeking a possible buyer before BHP, the world's biggest miner, made its all-share offer last week.
It has been speaking in recent weeks to luxury houses and Gulf sovereign-wealth funds, according to the Wall Street Journal. It suggested a partnership between could emerge as the final buyer.
Meanwhile Anglo has rejected the BHP bid as far too low, describing is as "highly unattractive". BHP until 22 May to make a firm bid or withdraw.