De Beers Has A New CEO, Bruce Cleaver

Bruce Cleaver

Bruce Cleaver has been appointed the next CEO of De Beers. The announcement was made Friday morning by Anglo American and De Beers and the appointment will take effect on July 1. 

Anglo American, one of the world’s largest mining companies, owns an 85 percent share of De Beers.

Cleaver, 51, will replace Philippe Mellier, who announced his resignation Friday after serving in the top position at De Beers for approximately five years. 

Cleaver served as De Beers’ executive director responsible for strategy and commercial relationships until 2015, also serving as co-acting CEO for a year prior to Philippe Mellier’s appointment in 2011. He was appointed group director of Strategy and Business Development for Anglo American in 2015. 

“Bruce's leadership of De Beers' strategy and its commercial and government relationships working alongside Philippe and over much of the last decade, combined with his time working with us to shape the new Anglo American strategy, provide strong continuity at an important stage in the diamond market's recovery,” said Mark Cutifani, chief executive of Anglo American and Chairman of De Beers. 

Philippe Mellier

Cleaver takes over for the diamond mining and marketing giant at a difficult time, as 2015 was diamond industry’s worst year since the global recession. A decline in consumer demand led by China caused excess inventory of the precious gem and led to an oversupply of diamonds. 

This year marked a mild recovery in diamond demand led by an increase in demand in the United States, which accounts for 45 percent of global diamond demand. 

“The structural dynamics of the diamond market continue to improve, led by the strength of consumer demand for diamond jewelry,” Cutifani said. “With the proven management team in place, De Beers is well positioned to maximize value for all its stakeholders across the diamond value chain.”

Cleaver added: “I am honored to be asked to lead one of the world’s great companies. Diamonds are as relevant to today’s consumers, all over the world, as they were to their parents and their parents before them. Diamonds have also made positive contributions to a host of countries that have used their revenues wisely, to communities and to all who have been touched by their mystique and the practical benefits of responsible mining and ethical sourcing. As the world continues to evolve ever more rapidly, it is our task to ensure that we remain as relevant as we are today and to grow our position in the luxury world.”

Mellier—who previously served as president as Alstom Transport, a French multinational conglomerate—was an industry outsider when he was appointed to lead De Beers in 2015. He said he had always planned to hold the top job at De Beers for five years. 

“Having steered through some of the diamond industry’s toughest times and with the market showing signs of recovery, now is the right time for me to pass the baton to the next generation. I have worked closely with Bruce Cleaver throughout and I have no doubt about his abilities and experience to lead De Beers on the next stage of its journey as the world’s leading diamond company.”

Cutifani noted that Mellier “has led De Beers with great agility, transforming the company’s strategic and operational mindset with a strong customer focus to ensure that consumer desire for diamond jewelry is at the very heart of decision making across the diamond pipeline. He has navigated through structural change and considerable market volatility over the last five years, while cementing De Beers’ unquestioned leadership position.”  

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Anglo American Receives Regulatory Approval for De Beers Acquisition

London-based mining giant Anglo American said Friday that it has received final regulatory approval to acquire the Oppenheimer family’s 40 percent stake in the De Beers Group.

“Now that all the conditions to the transaction have been satisfied, a formal pre-emption offer will be served by CHL Holdings Limited (representing the Oppenheimer family interests) on Anglo American and the Government of the Republic of Botswana under the terms of the De Beers Shareholders' Agreement,” Anglo-American said in a statement Friday.

The Oppenheimer family, which has owned the De Beers Group for more than 80 years, announced in November that it will sell its remaining 40 percent stake in the diversified diamond company to Anglo American plc for $5.1 billion in cash. Consent under Section 11 of the South African Mineral and Petroleum Resources Development Act 2002 was the final approval required for this transaction to proceed.

The pending acquisition means that Anglo American will increase its current 45 percent shareholding in the world's largest diamond company to up to 85 percent, subject to adjustment as provided for in the agreement. In January 2012, the transaction was approved by Anglo American shareholders, with 99.94 percent voting in favor.

The Government of the Republic of Botswana, which currently owns a 15 percent stake in De Beers has the opportunity to participate in the transaction and increase its interest in De Beers, on a pro rata basis, to up to 25 percent.

In the event that the GRB exercises its pre-emption rights in full, Anglo American will acquire an incremental 30 percent interest in De Beers, taking its total interest to 75 percent, and the consideration payable by Anglo American would be reduced proportionately.

Anglo American expects the transaction to close in the second half of 2012, in line with its previously stated timeline.

De Beers is a family of companies that dominate the diamond, diamond mining, diamond trading and industrial diamond manufacturing sectors. De Beers is active in every category of industrial diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea. Mining takes place in Botswana, Namibia, South Africa and Canada. The company’s subsidiaries also include the Diamond Trading Company, the rough diamond sales and distribution arm of the company, the Forevermark diamond brand and De Beers Diamond Jewellers, a luxury joint-retail operation with LVMH-Moët Hennessy Louis Vuitton.

Anglo-American is one of the world’s largest mining companies with a portfolio that includes iron ore and manganese, metallurgical coal and thermal coal; base metals – copper and nickel; and precious metals and minerals – in which it is a global leader in both platinum and diamonds. The company operates in Africa, Europe, South and North America, Australia and Asia.

Anglo American Buys 40% Stake in De Beers Group for $5.1 Billion

The Oppenheimer family, which has owned the the De Beers Group  for more than 80 years, announced Friday that it will sell its remaining stake in the company to Anglo American plc for $5.1 billion in cash.

The move will boost Anglo American’s current 45 percent stake in De Beers to 85 percent. Nicky Oppenheimer will remain as chairman of De Beers and the recently hired CEO, Philippe Mellier, will remain in his position, the London-based mining company said.

Anglo American has entered into an agreement with CHL and Centhold International Limited (“CIL”), together representing the Oppenheimer family interests, to acquire their 40 percent interest in DB Investments and De Beers SA, the two companies said in a joint statement.

Under the terms of the existing shareholders’ agreement between Anglo American, CHL and the Government of the Republic of Botswana, the GRB has pre-emption rights in respect of the CHL Group’s interest in De Beers, enabling it to participate in the transaction and to increase its interest in De Beers, on a pro rata basis, to up to 25 percent. In the event that the GRB exercises its preemption rights in full, Anglo American, under the proposed transaction, would acquire an incremental 30 percent interest in De Beers, taking its total interest to 75 percent, and the consideration payable by Anglo American to the CHL Group would be reduced proportionately.

Anglo American had been the largest shareholder in De Beers since it became a private company in 2001 and as a longstanding shareholder in De Beers prior to that.

“De Beers’ geographically diverse portfolio comprises large scale, low cost mining assets with proven distribution, sales and marketing capabilities and further potential from its leading pipeline of greenfield and brownfield projects and an expanding consumer-facing footprint,” Anglo American said in the statement.

“Today’s announcement marks our commitment to an industry with highly attractive long term supply and demand fundamentals,” Cynthia Carroll, chief executive of Anglo American, said in the statement. “Underpinned by the security of supply offered by a new 10-year sales agreement with our partner, the Government of the Republic of Botswana, this forms a compelling proposition.… I believe that the benefits brought by Anglo American’s scale, technical, operational and exploration expertise and financial resources, combined with the unquestionable leadership of De Beers’ business and iconic brand will enable De Beers to enhance its position across the diamond pipeline and capture the potential presented by a rapidly evolving diamond market.”

Nicky Oppenheimer, De Beers chairman representing the Oppenheimer family interests, said: “This has been a momentous and difficult decision as my family has been in the diamond industry for more than 100 years and part of De Beers for over 80 years. After careful and deliberate consideration of the offer, and what is in the best interests of the family, we unanimously agreed to accept Anglo American’s offer. Anglo American is the natural home for our stake as they have been major shareholders in De Beers since 1926 and have a deep knowledge of the diamond business.”

The Minister of Minerals, Energy, and Water Resources, Dr. Ponatshego H Kedikilwe, on behalf of the Republic of Botswana said: “The diamond industry is a major contributor to our economy in Botswana. We are grateful to the Oppenheimer family for their vision and contribution to the diamond industry and to Botswana and we will proudly take forward that legacy with Anglo American. We look forward to building on the excellent relationship we have with Anglo American, both through our ownership of De Beers and through the Debswana joint venture.”

The transaction is expected to be accretive to underlying earnings before depreciation and amortization on fair value adjustments in the year of acquisition, Anglo American said.

De Beers CEO to Resign as Diamond Sales Rise 48%

De Beers said Friday that Chief Executive Officer Gareth Penny will step down later this year as the world’s largest diamond producer reported strong first-half sales results, according to news reports.

Penny, 48, headed De Beers for the past five years and will leave after leading the company through a global recession that slashed demand for diamonds, De Beers said Friday.

Chief Financial Officer Stuart Brown and Chief Commercial Officer Bruce Cleaver will act as joint-CEOs while De Beers finds a permanent successor, the company said.

Earlier, De Beers, which produces about 40 percent of the world’s diamonds, said first-half sales of unpolished and uncut stones climbed 84 percent to $2.6 billion, boosted by improved demand from Asia, the company said Friday. In addition, mining giant Anglo American plc, which owns 45 percent of De Beers, said net profits for the diamond company totaled $148 million.

Output more than doubled to 15.4 million carats as the company reopened mines in Botswana and Namibia that were shuttered as gem consumption slumped amid the recession. De Beers said sales were helped by improved retail demand, particularly in India and China, and also in the U.S., the largest market, which accounts for half of the world’s diamond demand.

While rough diamond prices have risen in the past year, returning to levels last seen in June 2008, the global economic climate remains fragile, especially in the U.S., Japan and Europe, De Beers said.

With demand recovering, De Beers expects to produce between 30 million carats and 32 million carats this year, rising to about 40 million carats next year, Penny reportedly said.

In addition to Anglo American Plc, 40 percent of the company is owned by the Oppenheimer family and Botswana controls the remaining 15 percent. Penny told Reuters on Friday that the privately owned De Beers has no intention of issuing an IPO.