Richemont and Signet are in negotiations with Global Diamond Consortium (GDC) over joining the leading bidder for De Beers, according to media reports.
However, there’s no guarantee the luxury group and the US jewelry retailer will take part in the effort to purchase the miner from Anglo American, five people familiar with the matter told Bloomberg Thursday. The companies’ backing could boost the natural-diamond sector as it slowly recovers from one of its worst crises amid competition from lab-grown stones.
The size of the stakes Richemont and Signet are considering remains unclear. Yet with three Southern African states – Namibia, Angola and Botswana – and several private investors already committed, the two firms are likely to take relatively small holdings in a potential deal, Bloomberg continued.
Richemont is a major end user of De Beers’ diamonds, “giving it an important voice in the future of the natural-diamond industry,” Piral Dadhania, an analyst at RBC Capital Markets, said to Bloomberg. Richemont executives have publicly ruled out using lab-grown diamonds in the company’s products, he added.
The diamond industry has long sought greater support from luxury retailers to promote natural stones, the news agency said.
The consortium, which is led by former De Beers CEO Gareth Penny, was revealed as the preferred bidder for De Beers in July. It is now in talks with the government of Botswana, an existing shareholder, to increase its stake in the miner to about 25%, Bloomberg said earlier this week.
Image: De Beers office in Botswana. (De Beers)
