In a significant strategic move, Anglo American has confirmed its intention to seek a buyer for De Beers, the renowned diamond company it has overseen for nearly a century. This announcement comes in the wake of a bold $39 billion bid from mining behemoth BHP to acquire and dismantle the UK-based mining giant, IDEX Online reports.
The decision was hardly unexpected, given reports circulating about De Beers’ financial struggles and potential sale to interested parties. Anglo American, in a press release titled “Anglo American Accelerates Strategy for Enhanced Value Creation,” outlined its vision for a streamlined portfolio, prioritizing assets like copper, premium iron ore, and crop nutrients for maximum profitability.
Anglo’s CEO Duncan Wanblad stated: “Anglo American’s shareholders will see the full undiluted upside from these extensive changes, with the value of our copper and iron ore assets brought to the fore. De Beers, he said, will “be divested or demerged, to improve strategic flexibility for both De Beers and Anglo American.”
De Beers faced a challenging year with a significant sales downturn and plummeting per-carat prices, resulting in losses in the latter half of 2023. Despite efforts to mitigate the impact, production forecasts for the current year have been revised downwards.
Responding to Anglo’s announcement, De Beers’ CEO, Al Cook, expressed optimism about the prospects under new ownership, citing the company’s rich legacy, global footprint, and iconic brand synonymous with diamonds.
“We have unparalleled expertise, outstanding assets across more than 20 countries, a unique sales model and an iconic brand, synonymous with diamonds. I am confident that we will remain the diamond leader for the next century,” Cook stated, adding: “Later this month, we will present the new strategy for De Beers. Diamonds remain some of the most desired products around the world, and I am excited by the opportunity we have to bring their magic to a new generation. With the ongoing recovery in rough diamond demand, and such a positive outlook for the sector, I feel very confident in our future.”
Recently, Anglo rejected the “highly unattractive” all-share offer from Australian rival BHP, prompting speculation of rival bids or an increased offer from BHP, setting the stage for potential rival bids or a revised proposal from BHP before the looming deadline on May 22.
