It was recently announced that Anglo American is in discussions with the Global Diamond Consortium, led by former De Beers CEO Gareth Penny. According to a recent Bloomberg report, this group would pay around $USD750 million ($AUD1.06 billion) up front for Anglo American’s 85 per cent stake in the company and a further $USD250 million ($AUD354 million) later. The report noted that these terms have not been finalised.
Penny served as De Beers CEO for five years (2006 through 2010) and worked for Anglo American in various capacities for two decades. Consortium members include the governments of Namibia and Angola, along with major diamond traders. Leading figures from De Beers, Pluczenik, and Rosy Blue are reportedly involved.
The group would require Botswana’s approval for its remaining 15 per cent stake, as the government is seeking a larger share.
Anglo American acquired De Beers in 2001 at a $USD17.6 billion ($AUD24.9 billion) valuation. Anglo American then purchased the family’s remaining stake in 2011 for $USD5.1 billion ($AUD7.2 billion).
Duncan Wanblad, CEO of Anglo American, conceded in an interview with the Financial Times that the company may have underestimated the impact of lab-created diamonds in the broader market.
“Hindsight would probably show that we might have wanted to have been a little bit more aggressive on the signals we were getting,” he said.
“Mostly diamond markets, when they go through dips, recover very rapidly, and I think that there was a full expectation that might be the case here.
“Looking in the rear-view mirror is a much more perfect science than trying to do it in real life.”
De Beers’ value has since declined significantly due to the diamond market downturn, with Anglo American reducing its book value from $USD9.2 billion ($AUD13 billion) in 2023 to $USD2.3 billion ($AUD3.2 billion) earlier this year.
Industry analyst Edahn Golan of Tenoris recently published an in-depth timeline of the 150-year-long history of the De Beers Group.
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