Anglo American to Buy Oppenheimer’s Stake in De Beers for $5B

Anglo American Plc agreed to acquire the Oppenheimer family’s 40 percent stake in De Beers for $5.1 billion in cash. The acquisition will increase Anglo American’s stake in the diamond company to 85 percent from 45 percent currently.

”This transaction is a unique opportunity for Anglo American to consolidate control of the world’s leading diamond company – De Beers,” said Cynthia Carroll, Anglo American’s chief executive. ”Underpinned by the security of supply offered by a new 10-year sales agreement with our partner, the government of the Republic of Botswana, this forms a compelling proposition.” (Carroll prepared a video interview of this transaction on their website, watch now.)

Anglo American said Friday it entered into the buyout agreement with CHL and Centhold International Ltd., together representing the Oppenheimer family interests (CHL Group), to acquire the stake in DB Investments and De Beers SA (together De Beers).

Under the terms of existing shareholders’ agreement between Anglo American, CHL and Botswana, the government has pre-emption rights in respect of the CHL Group’s interest in De Beers, enabling it to participate in the transaction and to increase its interest in De Beers, on a pro rata basis, to up to 25 percent.

In the event that Botswana exercises its pre-emption rights in full, Anglo American, under the proposed transaction, would acquire an incremental 30 percent interest in De Beers, taking its total interest to 75 percent, and the consideration payable by Anglo American to the CHL Group would be reduced proportionately.

De Beers’ geographically diverse portfolio comprises large scale, low cost mining assets with proven distribution, sales and marketing capabilities and further potential from its leading pipeline of greenfield and brownfield projects and an expanding consumer-facing footprint.

Carroll noted that De Beers’ management team has led the business successfully through the financial turmoil of late and into a stable position and it is now well placed for the future, with improving performance throughout 2011.

“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,” said Nicky Oppenheimer (pictured), representing the Oppenheimer family interests. “After careful and deliberate consideration of the offer, and what is in the best interests of the family, we unanimously agreed to accept Anglo American’s offer.”

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