Anglo ready to part with diamonds: not to give in to Bhp spin-offs and divestments
The miner presents its plan to strengthen itself while avoiding a takeover. The sale of De Beers and many other assets is planned, as well as the spinoff (also requested by Bhp) of the South African platinum company.
4' min read
4' min read
Anglo American is poised to part ways with De Beers' diamond and platinum mines in South Africa, severing ties that have endured for nearly a century, and is also preparing to bid farewell to its metallurgical coal operations in Australia - for which it has reportedly seen 'strong interest' from potential buyers - and its nickel operations in Brazil, which are more likely to close.
Whether the Bhp takeover goes ahead or not, the 'break-up' now seems to be a sealed destiny for the mining group, which is choosing this very path - divestments and divestments - to try to recover from the crisis, in the hope that the strategy will convince its shareholders to snub the Australian giant's advances.
It was to Anglo's shareholders that Bhp's CEO Mike Henry immediately turned, challenging them at this point to compare the two alternatives, assessing 'which team is more capable and has a better track record in execution' and choosing the solution that 'creates the most value the fastest'.
Anglo's plan was unveiled on Tuesday 14, twenty-four hours after the board's second rejection of Bhp's takeover proposals: the still informal offer rose to a staggering USD 43 billion (from the previous USD 39 billion) and was equally rejected, with the justification that it continues to "undervalue" the group and its future prospects, but also because the precondition - described as "very unattractive" - of spinning off two South African subsidiaries in advance was not withdrawn. One of these is the platinum company, Anglo American Platinum (or Amplats), for which even Anglo's top management now plans a spinoff by 2025; the other is Kumba Iron Ore, which would instead be kept within the perimeter.
The restructuring plan - based on the portfolio review launched in February by Anglo CEO Duncan Wanblad - also considers iron ore strategic for growth and value creation: an indispensable second pillar, like copper, on which instead BHP (which is already the world's third largest iron producer, surpassed only by Vale and Rio Tinto) seems to focus predominantly.
