Anglo American-led group bids for De Beers

Mining giant Anglo-American PLC is interested in buying De Beers, the world’s largest diamond company. De Beers alerted the world about the buyout talks on Thursday through a press release.

A complex web of stock holdings already links the two companies, with each owning about one-third of the other.

The South Africa-based Oppenheimer family owns significant interests in both companies.

In the brief statement Thursday, De Beers said a consortium led by Anglo-American and the Oppenheimers, had approached it to discuss a possible offer for the company.

Debswana, a diamond company jointly owned by De Beers and the diamond-rich country of Botswana, owns 10% of the consortium.

Anglo-American has interests in gold, coal, and strategic metals. A merger with De Beers would make the combined company the biggest mining group in the world.

The proposed deal would involve a mixture of cash and stock.

Analysts told Reuters that the deal would value De Beers at $16 billion.

A buyout would untangle the companies’ crossholdings of stock, a situation Anglo-American Chairman Tony Trahar had promised to resolve.

The ”cautionary announcement” that De Beers released Thursday reads:

”Linked unit holders of De Beers are advised that De Beers has received an approach from a consortium comprising Central Holdings Limited (the Oppenheimer family holding company) (45%), Anglo American plc (45%) and Debswana Diamond Company (Proprietary) Limited (10%), a joint venture between De Beers and the Government of the Republic of Botswana. Detailed discussions between De Beers and these parties are taking place which may lead to a proposal being put to the holders of De Beers linked units. The proposal could involve an offer for all of De Beers linked units and a distribution of the Anglo American shares held by De Beers to linked unit holders that may realise an aggregate value of around US$40 per De Beers linked unit based on the current price of Anglo American shares.”