Luxury giant Richemont and US retailer Signet Jewellers are in talks to join a consortium that\u2019s in a prime position to buy diamond miner De Beers, according to five people familiar with the matter.<\/p>\n\n\n\n
The emergence of support from the owner of luxury brand Cartier and major jewellery retailer Signet will be seen by the industry as a boon for natural stones, at a time when the sector is slowly emerging from one of its worst-ever crises. <\/p>\n\n\n\n
The industry has been hit hard by a slump in Chinese demand and increased competition from lab-grown gems.<\/p>\n\n\n\n
The two groups are in talks with Global Diamond Consortium \u2014 a vehicle headed by former De Beers Chief Executive Officer Gareth Penny \u2014 about joining the group, said the people, who asked not to be identified as the talks are private. <\/p>\n\n\n\n
While negotiations are advanced, there\u2019s no guarantee that they\u2019ll join, some of the people said.<\/p>\n\n\n\n
GDC and Signet declined to comment. Richemont didn\u2019t respond to requests for comment.<\/p>\n\n\n\n
The consortium emerged in July as the preferred bidder to buy De Beers from miner Anglo American and is currently in talks with the government of Botswana, which already owns a stake in De Beers, about increasing its ownership to around 25%, Bloomberg reported on Tuesday.<\/p>\n\n\n\n
GDC already includes Namibia and Angola \u2014 two of the largest diamond producers \u2014 as well as some of the biggest diamond manufacturing companies.<\/p>\n\n\n\n
It\u2019s not clear what size stakes Richemont and Signet are discussing taking. But given that the three Southern African states will have significant shares of the company \u2014 as well as multiple other private investors who are already committed \u2014 Richemont and Signet are likely to have relatively minor holdings should a deal be agreed.<\/p>\n\n\n\n
Richemont is a major end user of De Beers\u2019 stones, \u201cgiving it an important voice in the future of the natural diamond industry,\u201d Piral Dadhania, an analyst at RBC Capital Markets, said in a note. <\/p>\n\n\n\n
He noted that Richemont executives have publicly expressed no desire to use lab-grown diamonds in the firm\u2019s products.<\/p>\n\n\n\n
Richemont shares were little changed in Zurich, after dropping as much as 1.1% following the news about the talks with GDC. Signet\u2019s stock was steady in US pre-market trading.<\/p>\n\n\n\n
Richemont is one of the world\u2019s leading luxury goods groups, controlled by South African billionaire Johann Rupert. <\/p>\n\n\n\n
Its brands include Vacheron Constantin, Cartier and Van Cleef & Arpels, with its jewellery division accounting for about three-quarters of its business. <\/p>\n\n\n\n
Signet is one of the biggest jewellery retailers, owning Zales, Jared and Kay.<\/p>\n\n\n\n
For years, the diamond industry has sought to win more support from luxury retailers to support the promotion of natural stones.<\/p>\n\n\n\n
After bumper sales during the pandemic, the sector was already weakening when it was hit by a collapse in Chinese luxury spending that saw prices plunge. <\/p>\n\n\n\n
The rising popularity of synthetic stones, trade tensions and sudden geopolitical shifts have added more pain.<\/p>\n\n\n\n
Anglo has been looking to sell the one-time diamond monopoly since it fended off an almost $50 billion approach from BHP Group in early 2024, but the process has been stymied by a crisis in the diamond market. <\/p>\n\n\n\n
Anglo has so far taken three impairments on the business in just three years, lowering its carrying value for the unit to $2.3 billion in February.<\/p>\n","protected":false},"excerpt":{"rendered":"
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