Anglo American is exploring an initial public offering of its diamond business De Beers, two people familiar with the matter told Reuters on Tuesday, with London the preferred venue, one of them said. The potential listing was the default option, the second person said, although the process is at an early stage.
The London-listed miner set out on Tuesday its plans for a potential break-up via a demerger or sale of some of its assets, as it fights off a £34 billion takeover bid from BHP Group. Anglo American has so far rejected two bids of £31.1bn and £34bn from BHP, claiming that both “significantly undervalue” the business. BHP has until next week to make a final offer or walk away.
Alongside De Beers, Anglo is planning to sell its coal business and exit a stake in South Africa-listed miner Anglo American Platinum, known as Amplats. CEO Duncan. Anglo holds 85{6036d1da27a1d3b5aa2f18d9e8df5a860af5f1dff3a0fe6451ed182baa94fd4e} of De Beers while the government of Botswana, where its biggest mines are, owns the remainder.
Mr Wanblad said the group was exploring a range of options to offload De Beers, which include a full or partial sale. De Beers, which accounts for just 6pc of Anglo’s business, could fetch around $7bn, according to JP Morgan. The ownership structure is a legacy of De Beer’s reliance on Botswana’s Debswana mine, which is the world’s richest mine by value.
French luxury giants LVMH, Richemont and Kering have been touted as possible suitors for the iconic brand. De Beers previously had a 16-year joint venture with LVMH running a diamond retail business called De Beers Jewellers. LVMH acquired Tiffany & Co
De Beers was founded in 1888 to explore South Africa’s Kimberly Mines, the world’s richest deposit of diamonds for over a century. Founded by business magnate Cecil Rhodes, the brand has been criticised for its colonial past – owing to its exploitation of local workers for the UK’s benefit.
Protests have often painted the De Beers founder as a symbol of colonialism, with the “Rhodes Must Fall” campaigns in South Africa and the UK demanding public statues of him be torn down. De Beers has sought to distance itself from its founder and history in modern times, saying “he does not represent the company we are today”.
Sir Edward Oppenheimer, whose father Ernest founded Anglo American in 1917, bought De Beers in 1926. Sir Edward effectively led Anglo until his death in 2000. Anglo’s sale of De Beers could face hurdles given a recent slump in diamond price, which could deter buyers.
De Beers and rival Alrosa PJSC, the two largest miners of rough diamonds, drastically slashed production earlier this year to try and end a post-Covid supply glut that has hammered prices. Mr Wanblad said he felt no pressure to complete a quick sale of De Beers, with the process expected to last until the end of 2025.
Some of Anglo’s shareholders are supportive of the plan. One top 10 investor said Anglo’s proposal was “compelling” and superior to what BHP had offered. “It leaves us owning a much more focused business with a much clearer strategy,” they said.
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