Anglo seals deal in De Beers takeover

Aug 17 2012 08:54

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Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Anglo completes De Beers transaction


London - The global mining group Anglo American [JSE:AGL] said on Tuesday that it has finalised its purchase of a 40% stake in De Beers that seals a takeover of one of the world's leading diamond companies.

"Anglo American announces the completion of its acquisition of a 40% shareholding in De Beers from CHL," a company that represents the interests of South Africa's Oppenheimer family, a brief statement said.

The deal raised Anglo American's holding in De Beers to 85% at a cost of $5.2bn, slightly more than initially estimated owing to "a number of adjustments as provided for under the agreement," the statement added.

Anglo American was able to take over De Beers after diamond-rich Botswana, which owns a 15% stake in De Beers, agreed to forego its right to buy another 25%.

De Beers is a global leader in the exploration, mining and marketing of diamonds.

Cecil Rhodes, the colonial-era politician and mining tycoon, founded De Beers in 1888. His fortune financed his imperial adventures for Britain, founding the state of Rhodesia which later became modern Zambia and Zimbabwe.

In the early 1900s, Ernest Oppenheimer, a young German employed by a British trading company, began buying up mining interests in neighbouring Namibia (then still South West Africa), with American backing.

In 1917 he formed the Anglo American Corporation and by 1920 his Consolidated Diamond Mines had become a force in the mining industry.

By the end of that decade, he had taken control of De Beers Consolidated Mines, and his control of the diamond industry had begun.

Oppenheimer's shrewdest move was to establish a central selling organisation that would stabilise sales and keep prices at a premium - a system which exists to this day and which has allowed De Beers to maintain its tight grip on the precious gem business.

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anglo american  |  de beers



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