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Indian Billionaire Anil Agarwal To Acquire 12% Stake In Anglo American

Anil Agarwal

Indian billionaire Anil Agarwal has stated that he plans to acquire a stake of about 12 percent, worth approximately $2.5 billion, in Anglo American, which owns diamond major De Beers and Anglo American Platinum, the world’s largest platinum producer, accounting for 38 percent of production.

Agarwal says he is interested in Anglo American because of its diamond and platinum mining business. Agarwal, who will make the acquisition through his family trust, Volcan Holdings, controls London-headquarted Vedanta Resources, a mining conglomerate with interests in zinc, lead, silver, copper, iron ore and aluminium.

Anglo American and Vedanta shares rose on the London Stock Exchange in response to the news.

Like most other miners, Anglo American was hit hard by the 2015 economic downturn that saw the mineral extraction sector losing a great deal of value. Anglo American, which was valued at $45 billion in 2011, plunged to just $5.6 billion by early 2016, risked being evicted from the FTSE 100 and had its credit rating cut to junk status by Moody’s.

It undertook a drastic restructuring, selling off assets and keeping only a core business group including diamonds and platinum. The iconic De Beers London offices on Charterhouse street were also sold. Anglo Chairman Mark Cutifani even said at one point that he was open to the idea of selling De Beers. The diamond miner, however, performed solidly, standing out as a pillar of support for Anglo at some of its lowest points.

Agarwal plans to use mandatory exchangeable bonds to make the acquisition.

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