DE BEERS GETS OFFER OF $17.6B
Byline: James Fallon
LONDON — De Beers is heading into private hands.
The diamond mining group Thursday said it has received a $17.6 billion offer from a consortium that includes its sister companies Central Holdings Ltd., Anglo American and Debswana Diamond.
The independent directors committee of De Beers has recommended its shareholders accept the offer.
The offer covers De Beers’ diamond operations as well as its cross-shareholding in Anglo American. The bid values the diamond business alone at $8.3 billion.
Anglo American currently owns 32.2 percent of De Beers, Debswana owns 5 percent and CHL holds 2.6 percent. If the bid succeeds, Anglo American and CHL would each own 45 percent of De Beers. Debswana, which is the primary supplier of diamonds to De Beers, will own the remainder.
The deal has no effect on the recent De Beers joint venture with LVMH Moet Hennessy Louis Vuitton, which plans to launch a major consumer brand of prestige De Beers jewelry.
Nicky Oppenheimer will remain chairman of De Beers and its new parent company, De Beers Investments, as well as CHL, which is the holding company for all the Oppenheimer family interests. CHL will manage De Beers Investments.
Oppenheimer said at a news conference that the move will end the confusing cross-shareholdings among the groups and give Anglo American’s operations greater transparency. He said the deal will enable De Beers to benefit from the continued commitment and leadership of the Oppenheimers, a closer relationship with Debswana, continuity of management and employees and Anglo American remaining a major shareholder.
The companies hope to conclude the deal by the middle of the year. The offer is made up of 0.43 of an Anglo American share worth $27.77, $14.40 in cash and $1 of De Beers combined final dividends.
“After a lot of thought, we have come to the conclusion that the right way to give value to De Beers’s shareholders is to take De Beers private,” Oppenheimer said.