① According to reports, Anglo-American Resources Group is considering selling its subsidiary Diamond Giant De Beers. As diamond prices continue to plummet, De Beers is in trouble; ② Anglo-American Resources values De Beers at 7.6 billion US dollars, but analysts' estimates of the deal fluctuate greatly, from more than 600 million US dollars to 4 billion US dollars.
AFP, April 26 (Editor Xia Junxiong) According to media reports citing sources, Anglo-American Resources Group is considering selling its subsidiary diamond giant De Beers. As diamond prices continue to plummet, De Beers is in trouble.
People familiar with the matter said that earlier this month, Anglo-American Resources Group was in negotiations with potential buyers in recent weeks, including luxury goods companies and the Gulf Sovereign Wealth Fund. Anglo-American Resources Group has allegedly signaled to potential acquirers that they are willing to accept the offer.
According to reports, negotiations are still in the early stages, and valuation issues have not yet been discussed. The final buyer may be a combination of luxury goods companies and financial investors.
De Beers is the world's largest natural diamond mining and retailer. Anglo-American Resources Group owns 85% of its shares, and the remaining 15% is held by the Botswana government.
Anglo-American Resources valued De Beers at $7.6 billion, but analysts' estimates of the deal fluctuated greatly, from more than $600 million to $4 billion. De Beers is difficult to evaluate because there aren't many similar companies.
De Beers was founded in 1888 and dominated the diamond market until the beginning of this century. However, after the collapse of the Soviet Union, Russia established the state-owned diamond company Alrosa (Alrosa), which impacted De Beers' monopoly. De Beers' market share has dropped from over 80% at its peak to around one-third at present, which is comparable to Erosa.
Diamond prices began last year and continued to fall due to the slowdown in global economic growth, the overall decline in demand for diamonds, and the rise of man-made diamonds.
In February of this year, Anglo-American Resources Group said it would charge De Beers $1.6 billion in impairment charges.
The Anglo-American Resources Group said this week that original diamond production fell 23% in the first quarter and lowered this year's production guidelines from 29 million carats to 32 million carats to 26 million carats to 29 million carats.
It is worth mentioning that BHP Billiton, the world's largest mining company, made a takeover offer for Anglo-American Resources Group this week, offering £31.1 billion (US$38.8 billion).
However, Anglo-American Resources Group rejected BHP Billiton's takeover offer on Friday and said it greatly underestimated the company's prospects.