De Beers’ Parent Company Anglo American: Will they Sell De Beers? Bloomberg Weighs In!
Gary Roskin
Roskin Gem News Report
Amidst recent media coverage, attention has gravitated towards the prospective buyout bid by mining titan BHP to Anglo American, the parent company of De Beers. This high-profile acquisition bid, estimated at £34 billion, has sparked a flurry of head-spinning analysis within financial circles.
Notably, much of the conversation centers on the strategic chess-playing between BHP and Anglo American, with a primary focus on the lucrative copper mining sector. However, parallel discussions underscore Anglo’s diverse portfolio, including significant interests in fertilizer, diamonds, and platinum.
Prominent financial publications such as Reuters, Barrons, and the Financial Times are diving head first into the intricate financial dynamics at play, outlining Anglo American’s rejection to the initial offer. Strategies to counter the bid involve potential divestment of assets, including the iconic De Beers, as well as platinum mining holdings.
Analysts believe BHP should punch up its offer, asserting that an increase from £34 billion to approximately £39.4 billion would be more likely to secure Anglo American’s acceptance. This escalation in the bid’s value, from £34 billion ($43 billion) to £39.4 billion ($50 billion), underscores the gravity of the negotiations and the strategic moves for both parties involved.
In short, Anglo American is betting its future on a simpler portfolio focused on copper and iron ore.
Duncan Wanblad, CEO of Anglo American
If That Happens, then What About the Diamond Industry?
For the rough diamond business, the question is not about the money (although that certainly does affect the business). No, it’s about ownership! Who is going to take over if or when De Beers is sold?
De Beers, and its parent company Anglo American, boast an intimate understanding of the rough diamond trade, characterized by site holder distribution practices, based upon a keen awareness of supply and demand sensitivities. Should De Beers be subject to a change in ownership, the pivotal question then arises: who possesses the trade expertise to seamlessly assume control and perpetuate De Beers’ renowned international strategy? With a storied legacy spanning over a century, De Beers’ enduring influence in global rough diamond distribution remains unparalleled, even after losing its monopoly decades ago.
Indeed, De Beers’ deep seated knowledge in this market gives the international diamond industry a somewhat reliable stability with supply for demand, and steadily increasing value. So the question is raised: in a battle between two mining Goliaths that apparently want to get out of the diamond mining business, who stands poised to fill the void and uphold De Beers’ legacy? Speculation actually offers up the Oppenheimers, with their historical ties to De Beers, and still small percent ownership in Anglo American, to emerge as contenders for leadership. This historical conversation underscores where the industry stands, wondering who will rescue De Beers from high stakes corporate mining conquests? – gr
Even if you simply skim the headlines below, please do watch the video report from Bloomberg News. (Directly below)
Source: Bloomberg
Important headlines in the News…
Bloomberg.com (subscription)
Anglo-BHP Battle Is Between Two CEOs Fighting Over Same Vision
By Thomas Biesheuvel and William Clowes
As Anglo American Plc sets out a survival plan that echoes the vision of its suitor BHP Group, the rival mining bosses are now locked in a battle to convince shareholders they are the man for the job.
Anglo Chief Executive Officer Duncan Wanblad and his BHP counterpart Mike Henry took center stage on Tuesday, as the personalities behind two of the world’s biggest miners came to the fore. Wanblad presented his own radical turnaround plan to investors, before Henry made his first public remarks on BHP’s bid at a conference in Miami.
MiningWeekly.com
BHP Needs to Bid about £32 a Share for Anglo, JPMorgan says
The analysts increased their December 2025 fair value for Anglo Copper by 25% to $27-billion (£17.47 a share) and increased their Anglo price target to £27.75 a share from £26 previously.
On Monday, Anglo rejected an improved £34-billion ($43-billion) proposal from BHP, saying BHP “continues to significantly undervalue” its business.
BHP has proposed Anglo divest its South African platinum and iron ore assets as a pre-condition to an offer for the rest of the company.
BizNews.com
Wood Mackenzie Warns about Risks Involved in Anglo’s Strategy Shift
Anglo American’s strategic shift to focus solely on copper and iron ore, as revealed in a Wood Mackenzie report, follows the rejection of BHP’s bid proposal. The move aims to maximise returns and future-proof the business, aligning with industry trends. While it could generate up to $25 billion through divestment, execution risks remain.
Bloomberg.com (subscription)
BHP Shareholders See Room for One More Sweetened Anglo Bid
Shareholders in BHP Group Ltd. and takeover target Anglo American Plc expect the world’s largest miner (BHP, with a market value of $148 billion) to come back with a third and improved proposal before a regulatory deadline next week…
Anglo has twice rejected BHP. Instead, to counter the latest $43 billion move, it has said it will itself exit diamonds, platinum and coal, turning into a miner focused on copper and iron ore — the crown jewels for the group.
FT.com (subscription)
Anglo’s Drastic Plan to Fend Off BHP
Restructuring will forever change 107-year-old miner as £34bn takeover battle looms
Anglo American has unveiled the most radical plans to reshape the 107-year-old producer of copper, coal and diamonds in decades, as it fends off a £34bn deal from industry leader BHP. Under its new vision, the FTSE 100 group would be rationalised to three divisions — copper, iron ore and fertiliser — shedding long-held mines producing platinum metals, metallurgical coal and nickel, as well as its trophy diamond brand De Beers, through sales and spin offs.
Anglo would also drastically slash spending on Woodsmith, its flagship $9bn project in England that will produce a yet-unproven fertiliser, to buy itself time to build a market for the product and save cash to implement the drastic overhaul.
Bloomberg.com (subscription)
Anglo Ditching De Beers Is Hard Blow for Troubled Diamond Market
The diamond industry has already been feeling the heat. Prices have slumped, Russian sanctions are threatening trade and the emergence of lab-grown gems is eating into some key traditional markets. Now, the sector’s most dominant name is being cast adrift.
MiningWeekly.com
De Beers IPO Considered Amid Break-up Plans, sources say
Anglo American is exploring an initial public offering (IPO) of its diamond business De Beers, two people familiar with the matter told Reuters on Tuesday, with one flagging London as the preferred venue.
The potential listing was the default option, the second person said, although the process is at an early stage. Both were speaking on condition of anonymity because the plans are private. 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 $43 billion takeover bid from BHP Group. CEO Duncan Wanblad said the plan was to spin out or sell De Beers, without giving further details.
“De Beers is a great set of assets and it’s a great business,” Wanblad told a media call earlier on Tuesday. “It is sitting at the bottom of a cycle. That cycle is more macroeconomic than fundamental.”
TheChemicalEngineer.com
Anglo American Plans to Cleave off Coal, Platinum, and Diamonds after Rejecting Fresh £34bn Offer from BHP
ANGLO AMERICAN has announced plans to break up the company, including getting rid of its coking coal, platinum, and diamonds , as it fends off a takeover from mining rival BHP.
Anglo American announced the restructure today after yesterday rejecting a £34bn (US$42.6bn) bid from BHP made on 7 May.
Anglo American has unveiled plans to squeeze more value from the company by divesting its coking coal business, selling off or demerging its iconic De Beers diamonds firm, and demerging its platinum business.
Duncan Wanblad, CEO of Anglo American, said: “These actions represent the most radical changes to Anglo American in decades. I believe these are the right decisions to position Anglo American to capitalise on the outstanding resource endowment opportunities within our portfolio today.”
In short, Anglo American is betting its future on a simpler portfolio focused on copper and iron ore.
Final Question of the Day
Will De Beers have the Same Fate as the Fertilizer Business?
Here’s a Reuters/MiningWeekly headline and feature story this morning that will help you keep in mind that Anglo American is no longer a diamond business with mining interests – that Anglo American is just another (very large) mining company:
Anglo American has Sought Fertiliser Partners for Months, says CEO
Anglo American has been looking for partners for its fertiliser project in North Yorkshire for around six months, CE Duncan Wanblad told Reuters, reiterating the business will be one of three pillars of the revamped miner, even as work there stalls.
The London-listed miner outlined a radical plan on Tuesday to shrink by divesting less profitable coal, nickel, diamond and platinum businesses, as it moves to fend off BHP Group’s $43-billion takeover offer.
As part of the plan, Anglo said it would slow the development of its Woodsmith fertiliser project in northeast England, pushing back first production from 2027.
For even more…
For even MORE on the subject, read Rob Bates at JCK Magazine: Where does De Beers Go From Here?
