Anglo American is discussing a deal worth about $1 billion (R16.4 billion) to sell its De Beers diamond business, just a fraction of what the one-time diamond monopoly was once worth.<\/p>\n\n\n\n
Anglo has been looking to sell De Beers since it fended off an approach worth almost $50 billion from BHP Group in early 2024, yet its disposal process has been stymied by a crisis in the diamond market. <\/p>\n\n\n\n
Anglo has so far taken three impairments on De Beers in just three years, lowering its carrying value for the unit to $2.3 billion in February.<\/p>\n\n\n\n
Earlier this month, it picked a consortium led by former De Beers Chief Executive Officer Gareth Penny as the preferred bidder.<\/p>\n\n\n\n
The current deal structure envisages Global Diamond Consortium\u2014a group led by Penny and including Namibia, Angola and some of the world\u2019s biggest diamond traders\u2014paying about $1 billion for Anglo\u2019s 85% stake in De Beers, according to people familiar with the situation.<\/p>\n\n\n\n
About $750 million will be paid upfront, with a further $250 million paid later, the people said.<\/p>\n\n\n\n
There will also be additional payments based on the business’s performance after the sale completes, some of the people said, asking not to be identified because the matter is private.<\/p>\n\n\n\n
The move to sell De Beers comes in the midst of one of the diamond industry\u2019s deepest and most prolonged crises that\u2019s seen gem prices plunge.<\/p>\n\n\n\n
After a period of bumper sales during the pandemic, the industry was already weakening when it was hit by a collapse in Chinese luxury spending.<\/p>\n\n\n\n
The rising popularity of synthetic stones. Trade tensions and sudden geopolitical shifts have added even more pain. Spokespeople for Anglo and Penny\u2019s consortium declined to comment.<\/p>\n\n\n\n
The company took control of De Beers in 2011, buying out the Oppenheimer family in a deal that valued the business at almost $13 billion.<\/p>\n\n\n\n
De Beers was valued at more than $18 billion in 2001, when Anglo and the Oppenheimers took the diamond giant private.<\/p>\n\n\n\n
GDC would also pump about $500 million into De Beers as part of the deal with Anglo, the people said. Still, the discussions are not complete, and there is no guarantee a deal will be completed or agreed on these terms, some of the people said.<\/p>\n\n\n\n
The buying consortium will also have to agree on a deal with Botswana. The African country\u2014which vies with Russia as the biggest diamond producer\u2014owns a 15% stake in De Beers.<\/p>\n\n\n\n
Botswana also holds a 50% interest in Debswana, its mining joint venture with De Beers that produces most of the country\u2019s diamonds. Botswana is seeking to increase its stake in the company.<\/p>\n\n\n\n
While President Duma Boko said last year that the country wants majority control of De Beers, the nation may be satisfied with a bigger minority holding, people familiar with the government\u2019s thinking have previously told Bloomberg.<\/p>\n\n\n\n
De Beers produces 70% of its diamonds in Botswana, but it also has mines in Canada, Namibia and South Africa.<\/p>\n\n\n\n
Penny ran De Beers for five years before leaving the company in 2010, when it was controlled by the Oppenheimer family.<\/p>\n\n\n\n
Penny led De Beers through the global financial crisis that slashed diamond prices, forcing it to idle mines and restore finances with a $1 billion rights offer.<\/p>\n\n\n\n
GDC\u2019s bid is based on focusing De Beers back on the mining and marketing of natural gems.<\/p>\n","protected":false},"excerpt":{"rendered":"
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