The Myth of the Diamond King Shattered! Anglo American plans to sell 85% stake in De Beers, valuation drops to only $1 billion

Anglo American is in talks to sell its De Beers diamond business, with the transaction valued at around $1 billion—more than 90% lower than the peak valuation of the company that once dominated the global diamond market.

According to Bloomberg, citing people familiar with the matter, earlier this month, Anglo American identified a consortium led by former De Beers CEO Gareth Penny as the preferred bidder.

Under the current deal structure, the consortium will acquire Anglo American's 85% stake for approximately $1 billion, with about $750 million paid at closing and the remaining $250 million paid later, along with additional earnouts linked to business performance.

The sale comes as the global diamond industry faces a severe cyclical crisis—luxury spending has declined, the penetration of synthetic diamonds has increased, and heightened geopolitical tensions have compounded the pressure, leading to a sharp drop in natural diamond prices.

Deal Structure: 85% Stake for Around $1 Billion, Consortium to Inject $500 Million Simultaneously

Sources revealed that the buyer is the "Global Diamond Consortium" (GDC), whose members include entities from Namibia, Angola, and several of the world's leading diamond traders, all led by Penny.

According to the negotiation terms, GDC will pay Anglo American about $1 billion in phased payments—approximately $750 million at deal closing, with the remaining $250 million to be settled later.

In addition, the buyer will inject around $500 million into De Beers to support the company's operations and transformation efforts.

Historical Valuation Comparison: From Over $18 Billion to About $1 Billion

This proposed consideration is far from De Beers' former value, reflecting profound structural changes in the natural diamond industry.

Anglo American acquired controlling interest in De Beers from the Oppenheimer family in 2011, valuing De Beers at nearly $13 billion at the time; as early as 2001, when Anglo American and the Oppenheimer family privatized the company, it was worth more than $18 billion.

Since then, Anglo American has written down the value of De Beers three times in just three years, with the latest book value reduced to about $2.3 billion as of February this year. Based on the current sale price of around $1 billion, there is a significant discount compared to its book value.

Behind this low-priced sale is a rare and deepening crisis in the global diamond industry.

After a brief sales boom during the pandemic, the industry quickly entered a downturn. The rapid contraction in luxury consumption directly impacted demand for high-end jewelry; advances in synthetic diamond technology swiftly captured market share, while trade frictions and sudden changes in the geopolitical landscape further squeezed profits throughout the value chain.

GDC’s acquisition strategy aims to focus on fundamentals by re-centering De Beers on the mining and sales of natural diamonds.

Botswana Negotiations: Sovereign Aspirations Behind the 15% Minority Stake

Anglo American's sale involves only its 85% holding; for GDC to achieve full integration of De Beers, it will still need to negotiate separately with the Botswana government, which owns the remaining 15% stake.

Botswana and Russia tie as the world’s largest diamond producers, and Botswana also holds a 50% stake in Debswana, De Beers’ mining joint venture—which accounts for the majority of De Beers’ diamond output.

About 70% of De Beers’ diamonds originate from Botswana, with additional mining operations in Canada, Namibia, and South Africa.

Botswana's President Duma Boko has expressed a desire to gain a majority stake in De Beers; however, informed sources note that the government may ultimately be satisfied with a higher minority holding rather than insisting on majority control.