South Africa Approves Anglo’s De Beers Deal

VENTURES AFRICA – South Africa’s minister of Mineral Resources has awarded Anglo American the final regulatory approval for its $5.1 billion acquisition of the Oppenheimer family’s stake in diamond producer De Beers. With this victory, the deal can close within few months.

As a result of the announcement, Anglo can officially offer the Botswana government a pro-rata share of the Oppenheimer family’s 40 percent stake, under a long-standing pre-emption agreement which could increase the Botswana’s 15 percent stake in De Beers to about 25 percent if it accepts the pre-emption agreement.

Under the pre-emption agreement, Anglo’s ownership of De Beers would rise to just 75 percent although its purchase price will reduce accordingly. But the government of Botswana rejects the agreement, Anglo’s stake will rise to 85 percent of De Beers to become the world’s largest diamond producer by value.

According to standard regulations, Botswana has 30 days to decide, but the countdown will only begin after the Oppenheimers and Anglo tie up the final outstanding details in the coming weeks.

The deal is expected to be closed in the second half of 2012.