De Beers suitor aims to win customers back to real diamonds
The group in pole position to buy De Beers said it aims to bring customers back to real diamonds, and away from the synthetic gems that have deepened an industry crisis.
The Global Diamond Consortium, headed by former De Beers chief executive officer Gareth Penny, is in the closing stages of completing its purchase of the company after fending off rival bids. Crucially, the group won the support of Botswana, home of the diamond giant’s biggest mines.
Still, the GDC is poised to take over De Beers as the diamond industry slowly emerges from its deepest ever crisis. The gem market has been hammered by a slump in Chinese luxury spending, as well as the rising popularity of synthetic stones.
Synthetic — or lab-grown — diamonds are chemically identical to mined stones, yet an explosion in low-cost supply from China and India has seen prices plummet. That has put huge pressure on segments of the jewelry market where pinched consumers can buy synthetic gems for a fraction of the price. Now GDC wants to spur demand for natural diamonds.
“The market is still experiencing challenges and they are all about consumer demand and finding a way to address synthetics,” a GDC representative said, in some of the group’s first public comments on its plans.
Ever since De Beers monopoly collapsed at the start of this century, the industry has grappled with how to promote diamonds and fight off challenges like synthetic stones. Multiple attempts at industry-wide marketing have failed to deliver, while De Beers own foray into lab-grown gems was quickly aborted.
“This is about effective marketing because this is a demand side problem,” according to the GDC representative. “We want to find new, innovative ways to create demand for diamonds and we believe we have a lot of good strategies for that.”
The GDC has built a consortium of some of the industry’s biggest players. Botswana will double its De Beers stake to 30%, while other producing countries Namibia and Angola will also invest. Oman and some key customers are also in the group, while luxury house Richemont and retailer Signet Jewelers Ltd. are in talks to join, Bloomberg has previously reported.
“This is the time for everyone to work together and for the industry to unite,” the GDC representative said. “Each partner needs to bring its own competitive advantage and a common vision to lift natural diamonds to where they should be and that’s something that we are working towards.”
Anglo American Plc has been looking to sell De Beers since fending off an almost $50 billion approach from BHP Group in early 2024, but the process has been stymied by the diamond market crisis. Anglo has taken three impairments on the business in just three years, lowering its carrying value for De Beers to $2.3 billion in February.
Bloomberg reported earlier this year that Anglo is discussing a De Beers valuation of about $1 billion, with more payments based on the future performance of the business.
“It’s a process with Anglo American and we are trying to get things finalized as quickly as we can,” the GDC representative said.
(By Mbongeni Mguni and Thomas Biesheuvel)
Angola seeks 10% stake in De Beers under Anglo’s proposed exit
Angola is seeking a 10% holding in De Beers as part of Anglo American’s (LON: AAL) proposed sale of its majority stake in the diamond producer, a mines ministry spokesperson told Reuters on Friday.
Anglo American put De Beers, which operates and explores for diamonds in Botswana, Namibia, Angola, South Africa and Canada, up for sale in 2024 as part of a broader restructuring amid falling diamond prices and growing competition from synthetic stones.
Botswana, which had the right of first refusal on Anglo American’s stake, on Monday backed the deal, saying it will double its holding to 30%.
President Duma Boko said that while Botswana would become De Beers’ single largest shareholder, the governments of Namibia and Angola would also participate in the transaction.
Angola’s mines ministry spokesperson was confirming a report in weekly newspaper Novo Jornal.
The report said Namibia was also seeking a 10% stake in De Beers. Namibian officials did not immediately respond to requests for comment.
Private buyers interested
Anglo American owns 85% of De Beers, the sale of which has also attracted interest from private buyers.
Swiss luxury group Richemont (SWX: CFR), owner of Cartier, is among firms in talks to join the Global Diamond Consortium, which Botswana said was the preferred bidder.
Richemont CEO Nicolas Bos said on Friday that the company sees the importance of natural precious stones for its collection, but declined to comment on potentially joining the group to buy De Beers.
In addition to Botswana, Angola and Namibia, the Global Diamond Consortium has said it is also working with Oman towards becoming co-owners of De Beers.
Anglo American said on Monday it would continue to work with the African nations and the consortium towards agreeing binding transaction documents.
(Reporting by Olivia Kumwenda-Mtambo;Additional reporting by Brian Benza in Botswana, Miguel Gomes in Luanda and Nyasha Nyaungwa in Windhoek;Writing by Sfundo Parakozov;Editing by Alexander Winning, Kirsten Donovan)
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