Anglo American’s sale of its 85% stake in De Beers has attracted interest from “serious buyers” and could be completed within the next six to nine months, Anglo CEO Duncan Wanblad (pictured) told analysts Thursday.
“Our commitment to exit De Beers is unwavering,” Wanblad said at a press conference following the release of Anglo’s first-half financial results. “We are progressing with both a trade sale and listing options in parallel.… We continue to make good progress on both tracks.”
The government of Botswana, which currently owns 15% of De Beers, recently expressed interest in taking a majority stake in the company. Wanblad said that while Anglo has held talks with Botswana about increasing the country’s shareholding, “a trade sale absolutely remains our preferred exit route for the business, but only if we can find the right buyer, at the right terms.”
He later said that Anglo has been looking for suitors “who genuinely understand the market, who are serious buyers, who absolutely have the wherewithal and the backing to be able to complete a transaction like that.
“That then sifts down to a much smaller group of people that you would take through into a formal process. So that’s where we are now, with this smaller group.
“All of the players in our process at this particular time are absolutely credible, in terms of (a) their understanding of the industry and (b) their ability to run and operate a business such as De Beers,” Wanblad continued. “They are associated with, and aligned to, and have experience of industry and markets in this space. That fills will me a huge amount of joy….
“Of course, this is a very big business and we will probably need multiple balance sheets to support the acquisition of it, and therefore it’s probably reasonable to assume that in the process there will be consortia and consortia formations that hopefully will prevail at the end of the day.”
Wanblad’s comments came as De Beers announced a $189 million loss in the first six months of the year, with sales falling 10%, to $2 billion.
A De Beers statement said that while “wholesale rough and polished diamond trading conditions remained difficult,” diamond jewelry demand was stable in the year’s first half.
“Demand in the U.S. held steady year-to-date, though the full impact of the tariffs has yet to be seen,” it said. “In India, leading retailers reported double-digit growth in the first quarter of the year. Meanwhile, the rate of decline in China appears to be slowing, while demand in Japan and the Gulf remains robust.”
(Photo courtesy of Anglo American)