Anglo American Mulling $1B De Beers Sale – Report

Anglo American is reportedly in talks to sell De Beers to Gareth Penny’s buying group for about $1 billion, a fraction of the diamond miner’s former value.

The Global Diamond Consortium will pay about $750 million up front for Anglo American’s 85% stake in the company and a further $250 million later, according to the current deal structure, Bloomberg reported on Wednesday, citing anonymous sources. The terms are not final, it cautioned.

The consortium, with former De Beers CEO Penny at the helm, also comprises the governments of Namibia and Angola and major diamond traders, Bloomberg said. These include leading individuals at Diarough, Pluczenik and Rosy Blue, insiders have told Rapaport News in recent months.

Additional performance-based sums will also be payable following completion, Bloomberg reported, based on some of the sources.

De Beers’ value has declined multiple times. The business was worth $17.6 billion when Anglo American and the Oppenheimer family took it private in 2001, according to reports at the time. In 2011, Anglo American acquired the Oppenheimers’ 40% of the company for $5.1 billion in a deal that valued the famous brand at $12.75 billion.

The diamond-market downturn forced Anglo American to write down the book value from $9.2 billion in 2023 to $2.3 billion earlier this year. Sources expected the sale price to be underwhelming, as the April edition of the Rapaport Intelligence Report outlined.

The Global Diamond Consortium would also put around $500 million into De Beers under the deal, Bloomberg cited the sources as saying. The group will need to reach an agreement with Botswana, which currently owns 15% of De Beers and has expressed a desire to grow its stake.

Anglo American and a spokesperson for the Global Diamond Consortium declined to comment. A De Beers spokesperson referred requests for comment to Anglo American.

Image: Signage at the Anglo American and De Beers offices in London. (De Beers)