Anglo American Gets Government Nod to Control De Beers

PUBLISHED: 07 Jul 2012 @ 00:23 | Comments (0) | More info about Kenneth G. Mondero

Diversified global miner Anglo American plc (LSE:AAL) has secured the nod of South Africa’s Minister of Mineral Resources Susan Shabangu in the US$5.1 billion acquisition of the Oppenheimer’s 40% stake in De Beers.

The deal, announced in November 2011, will make the London-listed group the largest diamond producer by value, once it completes in the second half of 2012.

All Conditions Met

Section 11 of the South African Mineral and Petroleum Resources Development Act of 2012 requires the consent of the Minister of Mineral Resources to finally approve the transaction.

Shareholders of Anglo American had approved the acquisition in January 2012, casting 99.94% in favour.

“Now that all the conditions to the transaction have been satisfied, a formal pre-emption offer will be served by CHL Holdings Limited (CHL), representing the Oppenheimer family interests, on Anglo American and the Government of the Republic of Botswana (GRB) under the terms of the De Beers Shareholders’ Agreement.”

Pre-emptive Rights

Under the terms of the De Beers Shareholders’ Agreement, the GRB has pre-emptive rights to increase its interest in the De Beers from the 15% it now holds to 25%.

Anglo American, which already owns 45% of the Luxembourg –based De Beers, will raise its stake to 85% should the Government of the Republic of Botswana (GRB) declines to exercise its pre-emptive rights.

“In the event that the GRB exercises its pre-emption rights in full, Anglo American will acquire an incremental 30% interest in De Beers, taking its total interest to 75%, and the consideration payable by Anglo American would be reduced proportionately,” AAL disclosed.

De Beers has been with the Oppenheimer family since 1927, when it was controlled by Sir Earnest Oppenheimer, who founded Anglo American.

Company Spotlight

Anglo American plc is one of the world’s largest mining companies holding a portfolio of assets spread across Africa, Europe, North and South America, Australia, and Asia.

The company was founded by Sir Earnest Oppenheimer in 1917 and started trading on the London Stock Exchange in 1999.

Part of the FTSE 100 Index, shares of Anglo American lost 55 pence to £21.10 a share at 3:15 PM GMT.

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