Anglo American Buys Controlling Stake in De Beers
Mining giant Anglo American has taken over diamond producer De Beers after paying the Oppenheimer family, which has ruled over the company for 80 years, $5.1 billion for the 40 percent interest in the company.
Mining giant Anglo American now has the controlling stake in diamond producer De Beers after paying the Oppenheimer family $5.1 billion for the 40 percent interest in the company.
Nicky Oppenheimer, who represented the De Beers owners, said that Anglo American would also have the option to further raise its interest in the company up to 85 percent.
But Oppenheimer said that the Anglo American could only exercise the option to buy as mush as 85 percent of the company if the government of Botswana opted not to exercise its rights to buy 25 percent of the family’s shares before the transaction was officially closed.
With the deal now in place, Anglo American has ended the dynasty’s 80-year ownership in the world’s largest diamond miner.
“This has been a momentous and difficult decision as my family has been in the diamond industry for more than 100 years and part of De Beers for over 80 years," Oppenheimer said.
At present, the Oppenheimer family shares in De Beers is being held by CHL Group.
Due to the increasing demand for diamonds in fast-emerging markets, miners are having a hard time keeping pace and older mines are becoming exhausted and producers lack new discoveries.
According to reports, rough diamonds supplies, which are turned into polished gems, are forecast to remain flat in the next five years and will fail to match demand driven by China and India.
Immediately after the announcement, Anglo American shares increased by 3.4 percent during the midday trading at the London Stock Exchange.
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