From the pinnacle of monopoly to a billion-dollar deal: How did the empire of De Beers, the African diamond giant, collapse?

Written by Amna Hassan

In a shift reflecting the deep crisis hitting the global diamond market, De Beers, which has dominated the diamond trade for decades, is approaching a historic change in its ownership, after Anglo American entered advanced negotiations to sell its controlling stake of 85% for about $1 billion, in a deal that represents a huge decline compared to its value of more than $18 billion about a quarter of a century ago.

A coalition led by a former president to save the company

According to media reports, former De Beers CEO Gareth Penney is leading the World Diamond Union alliance seeking to acquire the company, in a deal that includes an initial payment of $750 million, followed by a deferred payment of $250 million, along with capital investments of up to $500 million to support the company’s future operations.

Despite the progress of the negotiations, a final agreement has not yet been reached, as some financial terms and future performance conditions are still under negotiation.

Crisis hits the global diamond market

The decision to sell comes at a time when the natural diamond sector is facing one of its toughest periods in recent decades, with rough diamond prices continuing to fall as a result of the global economic slowdown and declining demand for luxury goods.

The rapid spread of lab-grown diamonds, which are offered at much lower prices than natural stones, has also reshaped the market and drawn away a large segment of consumers, especially with declining spending in China, one of the largest markets for luxury diamonds.

Restructuring after investor pressure

Anglo American is seeking to divest its non-core assets as part of a plan to restructure its business, after facing a massive takeover bid from BHP Group in 2024.

Since then, De Beers has been placed at the top of the list of assets up for sale, along with its platinum and steelmaking coal businesses.

Botswana is the key to completing the deal

Despite the consortium being chosen as the preferred buyer, the success of the deal will still depend on the approval of the Botswana government, which owns a 15% stake in De Beers and seeks to increase its influence within the company, given the importance of the diamond sector to its national economy.

historic collapse in market value

The potential deal reveals the extent of the decline suffered by De Beers. After reaching a value of more than $18 billion in 2001, and then about $13 billion in 2011, its book value has fallen to $2.3 billion this year, while it may now be sold for only $1 billion, in a scene that embodies the major transformations taking place in the global diamond market, and closes the chapter on one of the most famous empires in the history of the gemstone industry.