Botswana opts not to raise De Beers stake, clears way for Anglo

Botswana has decided not to take up its preemptive rights to acquire an additional 10 percent stake in De Beers.
Botswana, which holds a 15 percent stake in the diamond company could have coughed out over $1 billion, had it decided to exercise its rights.
Anglo said in a statement posted on its website that Botswana’s decision meant that it would acquire an incremental 40 percent interest in De Beers for a total cash consideration of $5.1 billion, taking its total interest to 85 percent.
"The innovative partnership between Anglo American and the Government of the Republic of Botswana (GRB), as the shareholders in De Beers, is a clear demonstration of the level of commitment of the GRB to the long term prosperity of the world’s leading diamond company,” said Anglo chief executive Cynthia Carroll.
“We look forward to strengthening this longstanding and proven partnership which provides a close alignment of interests between Anglo American and Botswana and builds upon the ten year sales agreement between De Beers and the GRB in relation to Debswana’s production."
Analysts had said last month that Botswana would unlikely boost its shares in De Beers, as there was little strategic rationale in Gaborone spending $1.26 billion to increase its stake in a business, which it effectively “controls”.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished