Anglo American explores De Beers IPO as part of break-up
Anglo American is exploring an initial public offering of its diamond business, De Beers, two people familiar with the matter told Reuters on Tuesday, with one flagging London as the preferred venue.The potential listing was the default option, a second person said, although the process is at an early stage. Both were speaking on condition of anonymity because the plans are private.
The London-listed miner set out on Tuesday its plans for a potential break-up via a de-merger or sale of some of its assets as it fights off a US$43 billion takeover bid from BHP Group.
CEO Duncan Wanblad said the plan was to spin out or sell De Beers, without giving further details. Anglo holds 85% of De Beers, while the government of Botswana, the location of its biggest mines, owns the remainder.
Anglo declined to comment. Botswana's government did not immediately respond to a request for comment.
"De Beers is a great set of assets and it's a great business," Wanblad told a media call earlier on Tuesday. "It is sitting at the bottom of a cycle. That cycle is more macroeconomic than fundamental."
De Beers could fetch a valuation of eight to 10 times its core earnings, one of the people said.
Although he supports the growth strategy Anglo has developed for De Beers, the world's largest diamond producer by value, Wanblad said Anglo believes it is "better executed by different owners and in a different structure" from today's.
Like other luxury goods, diamonds have suffered a fall in global demand. De Beers, which both mines diamonds and produces synthetic gems via its Lightbox Jewellery unit, has been limiting supply and offering flexibility to contracted customers.
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The Namibian government is a 50% partner in De Beers' Namibian project. De Beers conducts marine-based diamond recovery around 90 metres to 150 m below sea level in the Atlantic Ocean off the Namibian coast, operating a fleet of seven vessels. In 2022, De Beers acquired the world's most advanced diamond recovery vessel, the Benguela gem, which bolstered the Namibian operation's production.
Production at De Beers' Namibia projects decreased by 4% to 0.6 million carats due to marginally lower grades at the land operations.
-Additional reporting by Ogone Tlhage