Anglo American Takes Control Of De Beers

Business & Finance - Industry

Friday, 04 November 2011 13:00

Written by Barry McNamara

Anglo American announced Friday it had taken control of diamond company De Beers after agreeing a $5.1bn (£3.2bn) deal to buy the Oppenheimer family's 40% stake.

The deal increases Anglo American’s current 45% shareholding in the world’s leading diamond company to up to 85%.

The news follows less than a fortnight after the De Beers backed Element Six company in Shannon reported a pre-tax profit of $42.4 million (€30.7m) in 2010, less than a year after the plant was threatened by closure.

Today’s deal raises Anglo's stake in the world largest diamond distributor to 85%, with the remainder owned by the Botswana government.

Cynthia Carroll, Chief Executive of Anglo American, said: “This transaction is a unique opportunity for Anglo American to consolidate control of the world’s leading diamond company – De Beers. Today’s announcement marks our commitment to an industry with highly attractive long term supply and demand fundamentals. Underpinned by the security of supply offered by a new 10-year sales agreement with our partner, the Government of the Republic of Botswana, this forms a compelling proposition."

"De Beers’ management team has led the business successfully through the financial crisis and into a stable position and it is now well placed for the future, with improving performance throughout 2011. I believe that the benefits brought by Anglo American’s scale, technical, operational and exploration expertise and financial resources, combined with the unquestionable leadership of De Beers’ business and iconic brand will enable De Beers to enhance its position across the diamond pipeline and capture the potential presented by a rapidly evolving diamond market.”