Anglo American Seeks New Owner for De Beers
May 15, 24
(IDEX Online) - Anglo American has confirmed it is seeking a buyer De Beers, the diamond company it has controlled for almost a century.
The move follows a $39bn bid by mining giant BHP to buy and break up the UK-based mining giant.
It comes as no surprise, following reports that the loss-making De Beers has already been touted to potential buyers.
Anglo said yesterday (15 May) that it will sell or demerge both its diamond and platinum operations (as well as nickel and steelmaking coal) to focus on copper and other more profitable parts of its business.
In a press statement entitled "Anglo American accelerates delivery of strategy to unlock significant value" it made the case for a "radically simplified portfolio" with copper, premium iron ore and crop nutrients as its big earners.
"Anglo American's shareholders will see the full undiluted upside from these extensive changes, with the value of our copper and iron ore assets brought to the fore," said Anglo CEO Duncan Wanblad.
De Beers will "be divested or demerged, to improve strategic flexibility for both De Beers and Anglo American," the company said.
De Beers saw sales slump last year - down 36 per cent to $3.63bn, per carat prices down 25 per cent to $147 - and it made a loss in the second half of 2023. Sales slump in 2023 - down 36 per cent to $3.63bn, with per carat prices down 25 per cent to $147.
It has cut its production guidance for this year by 10 per cent and expects output to be down by around 3m carats from its original forecast of 29m - 32m carats to 26m - 29m carats.
De Beers issued an upbeat statement yesterday in response to the Anglo announcement, saying new owners could open up new possibilities for a company that was founded in 1888 and that held a monopoly on global diamond supply for over a century.
"We have unparalleled expertise, outstanding assets across more than 20 countries, a unique sales model and an iconic brand, synonymous with diamonds. I am confident that we will remain the diamond leader for the next century," said Al Cook, CEO of De Beers Group.
"Later this month, we will present the new strategy for De Beers. Diamonds remain some of the most desired products around the world, and I am excited by the opportunity we have to bring their magic to a new generation. With the ongoing recovery in rough diamond demand, and such a positive outlook for the sector, I feel very confident in our future."
Anglo's 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 said recently that it was keeping an eye on the De Beers balance sheet, but wasn't actively seeking to sell it off.
Sir Ernest Oppenheimer, founder of Anglo American, became a major De Beers shareholder and was elected to its board in 1926.
In 2011, Anglo American bought the Oppenheimer family's 40 per cent stake for $5.1bn, increasing its stake to 85 per cent (the Botswana government owns the remaining 15 per cent).
Anglo has rejected the "highly unattractive" all-share offer from Australian rival BHP, prompting speculation of rival bids or an increased offer from BHP, which has until 22 May, under UK takeover rules, to make a firm bid or walk away.
Pic of 25-ct rough diamond, courtesy De Beers.