Anglo Considering a De Beers IPO
May 15, 24
(IDEX Online) - Anglo American is considering an initial public offering (IPO) to dispose of De Beers, its loss-making diamond division, according to a Reuters' report.
Duncan Wanblad, CEO of the UK-based miner, announced plans yesterday (14 May) to divest or demerge its diamond, platinum, steelmaking coal and nickel assets in favor of more profitable copper, premium iron ore and crop nutrients. But he did not provide specific details.
Anglo is exploring an IPO, possibly in London, as its "default option", according to anonymous sources.
The company wrote down the value of De Beers by $1.6bn - or 17 per cent - to $7.6bn in February as reduced demand continued to drive down diamond prices.
One of Reuters' sources indicated De Beers could fetch a valuation of eight to 10 times its core earnings. Underlying EBIDTA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for FY2023 was $72m, down from $1.4bn a year earlier.
De Beers saw sales slump last year - down 36 per cent to $3.63bn, with per carat prices down 25 per cent to $147.
It made a loss in the second half of 2023, amassed a $2bn inventory of unsold diamonds and announced $100m of cuts annually, through job cuts and the sale of peripheral parts of the business.
Australian mining giant BHP has increased its bid for Anglo from $39bn to $42.7bn.
Pic courtesy De Beers.