Diamonds / Industry

Anglo Reportedly Eyeing De Beers IPO


Anglo American considers a De Beers IPO the “default option” for disposing of the business, according to stories in Reuters and The Guardian.

Reuters reported that Anglo wants to list the company on the London exchange, with one source estimating that De Beers could be valued at as much as 8 to 10 times its core earnings.

While The Guardian, like Reuters, quoted a source calling a De Beers IPO “the default option,” another source told the publication an IPO was “unlikely,” given the current volatility in the diamond market.

Anglo, which owns 85% of De Beers (the government of Botswana holds the other 15%), declined comment to JCK.

One person familiar with the De Beers–Anglo relationship tells JCK there was always a bit of a “culture clash” between De Beers and its majority owner. Anglo did provide significant mining expertise, but some on the De Beers side considered the company too bureaucratic and “slow,” without a feel for diamond marketing or trading, according to the source. Former Anglo CEO Mark Cutifani was considered a supporter of De Beers, and his 2022 departure made this “divestment” far more likely, the source says.

Many in the trade were unsettled by yesterday’s announcement that Anglo was selling De Beers, as it came at an already shaky time for the natural diamond trade. Still, the general consensus is that no sale—or spin-off—is imminent, and this is the beginning of a long process, which could take 18 months or more.

Diamonds aren’t the only business that might be affected by the “radical changes” in Anglo’s portfolio, as company CEO Duncan Wanblad described them in an investor presentation earlier this week. Anglo has traditionally helped fund Platinum Guild International, the industry’s promotional arm, but it now plans to sell off its platinum holdings.

In a statement released today, PGI said it expects the support to continue.

“Throughout its history, PGI has always been funded by South African platinum mining producers, of which Anglo American Platinum is a principal one,” said the PGI statement. “We expect market development to remain a key focus of the platinum mining industry and jewelry plays a strategic role in it as the category represents a third of global demand.”

(Photo: Getty Images)

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By: Rob Bates

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