Diamond giant De Beers in talks for $1B sale to consortium fraction of previous worth due to plummeting demand: report
Diamonds may be a girl’s best friend, but the business just ain’t what it used to be for De Beers.The onetime diamond monopoly is reportedly looking at a $1 billion offer from a consortium that wants to take it over – a huge reduction from De Beers’ previous valuation in the tens of billions of dollars.The British multinational is in sale talks with a group called Global Diamond Consortium, led by ex-De Beers CEO Gareth Penny, Bloomberg News reported Wednesday.An ongoing diamond crisis has seen De Beers’ valuation plummet from a peak of $50 billion to around $2.3 billion as of February, according to the outlet.Now Global Diamond Consortium wants to pay just $1 billion for the majority stake currently held by mining company Anglo American Plc, people familiar with the proposal told Bloomberg.The consortium would pay $750 million upfront, with the rest of the dough transferred later. Recent years have seen the diamond industry hammered by a variety of factors, Bloomberg noted.
After a sales boom during the COVID pandemic, luxury spending in China – a key market for natural diamonds – plummeted.Meanwhile, synthetic diamonds rose in popularity, with wedding site The Knot finding that nearly half of engagement stones in 2023 were lab-grown diamonds.
Demand for the genuine article nose-dived worldwide.Recent trade tensions and geopolitical tumult have only worsened the situation, Bloomberg reported.Both Anglo and Global Diamond Consortium declined to comment to the outlet.“The valuation (which is not confirmed) reflects the state of the diamond industry and the belief that the current challenges are long-term and not cyclical,” Joshua Freedman, senior analyst for the Rapaport Group, which covers the diamond industry, told The Post.
“It’s worth noting that the bidders are seeking outside funding for the deal, so it is dependent on external parties seeing enough value in De Beers,” he added.Victorian imperialist Cecil Rhodes founded De Beers in 1...