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Anglo American, the parent company of diamond miner De Beers, has confirmed that it has received an unsolicited proposal for a takeover.
BHP Group Limited has made a $USD38.8 billion ($AUD59.43 billion) bid for Anglo American, which the company described as an “unsolicited, non-binding and highly conditional combination proposal.”
BHP (Broken Hill Proprietary Company) was founded in 1885 and is headquartered in Melbourne. By market capitalisation ($USD144.7 billion), it is the 93rd largest company in the world.
CEO of Anglo American Duncan Wanblad told Rapaport News that the company was open to all possibilities.
“We are progressing through our asset review to optimise value by simplifying and improving the overall quality of the portfolio. Nothing is off the table,” he said.
Industry analyst Martin Rapaport said that the sale of Anglo American would open the door for unprecedented change within the international diamond industry.
“The primary motivation for the deal is BHP’s desire to obtain Anglo’s copper mines. Copper demand and prices are expected to surge as global demand shifts away from fossil fuels.
“Another factor is the sharp decline in Anglo’s share prices, down about 47 per cent over the past two years.”
He continued: “Should the deal go through, we expect De Beers to be sold off, creating an unprecedented opportunity for the restructuring of the diamond trade. De Beers is under pressure due to strong competition from synthetic diamonds and weaker demand from China.”
The Wall Street Journal has fuelled speculation that Anglo American may be considering selling the De Beers Group.
It reported that the company has “held conversations in recent weeks with potential buyers, including luxury houses and Gulf sovereign-wealth funds.”
De Beers expects a 10 per cent reduction in output to 26-29 million carats. The company reported an optimistic outlook after the most recent sales cycle.
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