Early approval expected in De Beers deal

The $16 billion takeover of De Beers by Anglo American and South Africa’s Oppenheimer family is set to be confirmed as early as next week, The Times of London reported Friday.

An announcement of the deal now hinges only on the formal approval of South Africa’s Reserve Bank, which is understood to have assured both companies that it will back the arrangement, the newspaper reported.

It is believed that De Beers’s shareholders will receive mostly Anglo American paper in return for their stock, with cash comprising only a small part of the payment, the newspaper reported.

It was revealed last week that Anglo American and the Oppenheimers would each emerge with 45% of De Beers under a proposal being discussed between the stalwarts of the South African mining industry. Debswana Diamond Co, De Beer’s biggest diamond supplier, will hold the remaining 10%.

The deal involves De Beers distributing its 35% stake in Anglo American among its shareholders, who will also receive additional Anglo American shares and some cash to take the value of the offer to about $40 per De Beers share.

The financing arrangements have not been disclosed, the newspaper reported. But it is believed that the Oppenheimers will see their 7.2% interest in Anglo American reduced, possibly to 5% as part of the agreement.

Nicky Oppenheimer, the De Beers chairman, is expected to retain managerial control of the diamond miner and marketer.

David Bird, an analyst with ABN Amro, said Anglo American, which holds 32% of De Beers, could inherit up to $2 billion of its own stock as a result of the deal, the newspaper reported.

It is understood that Anglo American is confident that it can resolve De Beers’s anti-trust dispute in the United States, which could see De Beers directors arrested if they travel to America, the newspaper reported.