Anglo American plans to sell the diamond business De Beers as part of a sweeping plan to break up the company to defend it against a £34bn takeover plot by its rival BHP.
The embattled London-listed mining company set out a radical new strategy to dismantle parts of the company, including the sale of the world’s biggest diamond miner, after rejecting a second unsolicited takeover offer from Australian miner BHP.
The Anglo chief executive, Duncan Wanblad, said the “clear, compelling and decisive plan” would also include the sale or demerger of its South African platinum business and its steel-making coal assets.
Anglo also plans to slow its investment in the Woodsmith fertiliser mine in the North York Moors next year from £1bn a year to £200m. It will then seek strategic investors to restart full-scale work on the polyhalite project from 2026.
Wanblad said the overhaul would unlock value for Anglo’s shareholders by creating a “radically simplified” company focused on “world-class assets” in copper, iron ore and fertilisers.
“These actions represent the most radical changes to Anglo American in decades,” he added.
A change of ownership for De Beers, which was once responsible for 85% of the world’s mined diamonds, would mark a major step change for the 136-year-old company in a crucial year for South African politics.
De Beers was founded in South Africa by the British mining magnate Cecil Rhodes in 1888 and was part-owned by the Oppenheimer dynasty, which founded Anglo American, until the family sold its 40% stake to Anglo in 2011.
The diamond business has struggled against falling sales in recent years because of the sluggish global economy and the rise of lab-created alternatives. But Wanblad said De Beers remained “a great business” which has already seen inbound interest from prospective investors.
“There’s no doubt in our mind that the structural issues that everyone talks about will pass,” he added.
The chief executive faces pressure from investors to prove that he can rescue Anglo’s flagging market value in recent years, which has left the company vulnerable to takeover by larger rivals. BHP’s takeover plans are expected to face competition from the Swiss mining company Glencore and the British-Australian miner Rio Tinto.
after newsletter promotion
The plans failed to win over the markets on Tuesday morning as Anglo’s share price fell 3% to £26.28, below BHP’s sweetened offer which valued Anglo shares at £27.53. The second approach was up from approximately £25 in BHP’s original offer.
The chief executive dismissed both approaches as “highly unattractive” because they undervalue the company’s long-term potential value. He also criticised BHP for the “disrespectful” timing of the approach before what is expected to be a highly contested general election in South Africa at the end of the month.
Wanblad said BHP’s approach had forced him to set out a new strategic vision for the company at a critical time for South Africa’s government, which is Anglo’s largest shareholder through its Public Investment Corporation and home to many of its mines.
“I would have handled this in a very different sort of way – and a very private sort of way,” he said of BHP’s approach.
