Unlocking Value: Why Anglo American's De Beers Spin-Off Positions It to Defeat BHP and Reward Investors
32min read As Anglo American navigates a pivotal moment in its corporate history, the strategic decision to spin off its iconic De Beers diamond division—while fending off BHP’s $34 billion hostile takeover bid—has created a rare opportunity for investors to capitalize on a company poised to redefine its future. By aggressively restructuring its portfolio to focus on high-margin commodities like copper and iron ore, Anglo American is not only shielding itself from BHP’s advances but also setting the stage for a valuation renaissance. Here’s why the stock deserves your attention now.
The De Beers Spin-Off: A Necessity, Not a Choice
De Beers, once a crown jewel of Anglo American’s portfolio, now represents a drag on shareholder value. With diamond prices down 20% in 2024 and production slashed by 26%, the division’s valuation has plummeted to $4 billion—a stark contrast to its $7.6 billion peak in 2023. The company’s $3.1 billion net loss in 2024 underscores the urgency of divesting this underperforming asset.
The spin-off, however, is more than damage control. By exiting non-core operations like diamonds, Anglo American is sharpening its focus on copper and iron ore—two commodities positioned to thrive as the world transitions to renewable energy and infrastructure spending surges. Copper, in particular, is critical to electric vehicles and solar panels, and Anglo’s 2024 output of 773,000 tonnes puts it among the global leaders.
How the Spin-Off Deters BHP—and Why It Matters
BHP’s aggressive $34 billion bid, aimed at acquiring Anglo’s copper assets, has backfired spectacularly. Anglo’s restructuring is a masterstroke of corporate defense: By spinning off De Beers and other non-core assets, the company complicates BHP’s ability to isolate and acquire its crown jewels. Under UK takeover rules, BHP’s final offer is due by May 22, 2025. Analysts now believe Anglo’s pivot has made BHP’s pursuit economically unfeasible, as the remaining core business is harder to disentangle and value.
This strategy has already borne fruit. Anglo’s shares rose 5% in March 2025 on restructuring progress, signaling investor confidence in its plan. Meanwhile, BHP’s delay in revising its offer—despite the looming deadline—hints at internal doubts about the deal’s viability.
Botswana’s Role: A Crucial, Yet Risky, Pillar of Success
The February 2025 agreement with Botswana, granting the government a 50% stake in De Beers’ diamond production and extending mining licenses to 2054, is a critical step forward. This partnership stabilizes De Beers’ operations, which supply 70% of its diamonds. However, unresolved tax disputes—including claims that Botswana waived $1.02 billion in owed taxes—could cloud the spin-off’s execution. Investors must monitor whether these issues delay the sale or dilute proceeds.
The Prize: A Streamlined Champion of Commodities
Anglo American’s vision is clear: become a leaner, more focused miner of the metals driving the energy transition. Copper production is expected to grow to 800,000 tonnes by 2026, while iron ore output hit a record 60.8 million tonnes in 2024. These assets, combined with cost-cutting measures, could unlock a valuation uplift of 20–30% over the next 18 months.
Risks and the Path Forward
The primary risks remain execution: delays in Botswana negotiations, a last-minute BHP bid, or further diamond market weakness. Yet the odds are increasingly in Anglo’s favor. BHP’s failure to raise its offer suggests it, too, sees the math against it. Meanwhile, copper prices are near decade highs, and iron ore demand from China’s infrastructure push remains robust.
Why Buy Now?
The confluence of strategic clarity, BHP’s waning threat, and sector tailwinds makes Anglo American a compelling buy. The stock trades at a 30% discount to its peers, with a P/E ratio of 6.5x—well below the sector average of 12x. Investors who act now can capture both the spin-off’s proceeds and the upside of a streamlined, high-growth miner.
The countdown to BHP’s deadline is a catalyst investors must not miss. Anglo American’s restructuring isn’t just about survival—it’s about becoming an indispensable player in the metals of the future. This is a rare moment to buy a company rewriting its destiny.
Action Items for Investors:
1. Buy Anglo American stock ahead of BHP’s May 22 deadline.
2. Monitor De Beers’ sale process for valuation clarity and Botswana’s tax resolution.
3. Track copper prices and Chinese infrastructure data for growth signals.
The restructuring has turned the tables. With BHP faltering and Anglo’s future brightening, this is a buy—and a hold—for the long term.
