EU Commission gives Anglo American the green light for De Beers takeover
Anglo American (LON:AAL) can officially take over De Beers as the European Commission granted the global miner authorization to proceed with its acquisition of the world’s biggest diamond company, announced in November.
The transaction means that Anglo now owns De Beers as it has increased its stake from 45% to 85% by buying out the Oppenheimer family for US$5.1 billion.
This is the end for the involvement of the Oppenheimer family in De Beers. However, the government of Botswana owns the remaining 15% of De Beers and has the option to raise it up to 25% .
“Anglo American is well positioned to enhance the value of De Beers through its expertise and scale in such areas as technical, supply chain and financial management functions as part of a simplified and more integrated ownership structure,” said the company in November.
De Beers and the Oppenheimer family are one of the most storied relationships in the world of diamonds, and perhaps in mining itself.
Cecil Rhodes formed De Beers Consolidated Mines in 1888. Recognizing that limiting the production of diamonds was the only way to enhance their value, Rhodes bought up or squelched competitors. Cullinan Mine, operated by Bernard and Ernest Oppenheimer, refused to join the De Beers cartel, and the business grew to rival De Beers. During World War I Cullinan Mine was finally absorbed into De Beers, and Ernest Oppenheimer became chairman of De Beers in 1927.
Anglo American was also founded by Ernest Oppenheimer in 1917.
There have been three generations of Oppenheimers exerting major control of De Beers, up to Nicky Oppenheimer, who represented the family during the sale.
“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.
Completion of the deal is expected in the second half of this year.