Cartier owner weighs De Beers bid with Signet

Cartier owner Richemont and U.S. jewellery retailer Signet Jewelers (NYSE: SIG) are discussing joining a consortium bidding for Anglo American’s (LSE: AAL) controlling stake in De Beers, Reuters and Bloomberg reported Thursday.

Anglo is selling its 85% holding in the diamond producer, with Botswana owning the rest. A potential deal has been reported at about $1 billion (C$1.43 billion), below De Beers’ $2.3-billion carrying value following three writedowns in as many years. The business recorded a $511-million underlying loss before interest, taxes, depreciation and amortization on revenue of $3.5 billion last year, Anglo’s results show.

The prospective investors are discussing joining Global Diamond Consortium, led by former De Beers CEO Gareth Penny. Talks involving Richemont are advanced, although there’s no guarantee it will join, Bloomberg reported. The size of either company’s potential investment hasn’t been disclosed.

Their participation would bring major sellers of finished jewellery into the ownership of a struggling supplier of rough diamonds. De Beers has faced weaker Chinese demand and competition from lab-grown stones, while an investment would give the retailers greater influence over their natural-diamond supply chain. Signet and De Beers already launched a joint marketing campaign in 2024 to promote natural diamonds to younger U.S. couples.

Bidders

Global Diamond Consortium emerged as the preferred bidder in July, according to Botswana’s government. The group includes participation from the governments of Namibia and Angola and diamond manufacturers. It’s nearing an agreement that could increase Botswana’s holding to about 25%, Bloomberg reported Tuesday, citing people familiar with the matter. Reuters said it couldn’t independently verify that report.

Botswana remains central to any transaction because it holds a right of first refusal and hasn’t said whether it will exercise it. The country supplied about 70% of De Beers’ rough-diamond production last year. A presidency spokesperson said Tuesday the government wouldn’t comment until a transaction had been concluded and signed, Reuters reported. Officials said this summer they expected completion in the fourth quarter.

Richemont, controlled by South African billionaire Johann Rupert, owns Cartier, Van Cleef & Arpels and watchmaker Vacheron Constantin. Signet’s brands include Kay, Zales, Jared and Canada’s Peoples Jewellers. Investment by jewellery interests in mining isn’t unprecedented: Graff Investments holds 15% of Gem Diamonds (LSE: GEMD), which operates Lesotho’s Letšeng mine.

Anglo put De Beers up for sale in May 2024 as part of a broader restructuring after fending off BHP’s (ASX: BHP) takeover approach. Independent diamond analyst Paul Zimnisky told MINING.COM earlier this year that a buyer with sufficient capital and strong execution could revive the business, with the loss of competing independent producers and sanctions on Russian diamonds strengthening its longer-term supply position.