Anglo American has entered preliminary discussions with banks regarding a potential initial public offering (IPO) of its diamond unit, De Beers.
The move forms part of a broader restructuring initiative announced last year by Anglo American CEO Duncan Wanblad, as the company seeks to divest from non-core assets and focus on higher-growth sectors. Alongside the IPO preparations, Anglo is simultaneously exploring the possibility of an outright sale of De Beers.
De Beers: Final Step in Anglo’s Asset Divestment
De Beers is the last major business unit in Anglo American’s planned exit from several commodity sectors. Since announcing its restructuring, the company has divested its coal and nickel operations and is preparing to exit platinum. De Beers remains the most challenging division to divest, due to ongoing difficulties in the diamond market.
Speaking at the Mining Indaba conference in February, Wanblad stated that De Beers would be structured as a stand-alone business ahead of any separation: “It’s going to be fully set up as a stand-alone business to make sure that it’s not going to be impacting as a drag in any way, shape or form on the business.”
Market Conditions and Valuation Challenges
The diamond industry is facing sustained headwinds, including weaker demand and increased competition from synthetics. These conditions have made it difficult for Anglo to find a buyer willing to meet expectations on valuation.
Anglo American has taken substantial impairments on De Beers’ value over the past two years, including a $2.88 billion write-down in February 2024, reducing the unit’s book value to approximately $4.1 billion. This followed a $1.56 billion impairment recorded in 2023.
De Beers’ latest financial results revealed a 23% decline in revenue to $3.29 billion and a net loss of $288 million for the year.
Botswana Partnership and Stake Considerations
De Beers has a 10-year sales agreement with the Government of Botswana, which holds a 15% stake in the business through its investment arm. Botswana has expressed interest in increasing its ownership, although no formal developments have been confirmed.
