Billionaire metals maven Anil Agarwal made a surprise bid for as much as 13% of British mining giant Anglo American Plc for $2.4 billion, a move that will give him a foot in the door of the $23-billion conglomerate, which is larger than his Vedanta Resources. It also gives him a piece of De Beers, the diamond powerhouse owned by Anglo American.
The move, made through his personal investment firm Volcan Investments, was announced late on Wednesday in London. While sources close to the Indian industrialist were insistent that it was not a “hostile bid“, the move comes a year after a merger proposal by Agarwal’s Hindustan Zinc was rebuffed by Anglo.
In an interview to Bloomberg at the World Economic Forum at Davos in January,Agarwal had said: “There was a proposal that Hindustan and Anglo American should merge. It was a good match. One and one wasn’t going to be two, but 11.
The full stake will equate to about 13% of Anglo’s stock, giving Agarwal, an investor long reputed to have a “risk-taking appetite“, enough influence to bring the metals and mining major back to the negotiating table. The shareholding of Anglo American is widely dispersed with the South African government holding a significant stake.
Agarwal seemed to play down any such intent. “This is an attractive investment for our family trust. Anglo American Plc is a great company with excellent assets and a strong board and management team who are executing a focused strategy to drive shareholder value. I am delighted to become a shareholder in Anglo American Plc,“ Agarwal said.
His interest in Anglo American may also lie in the mining company‘s ownership of De Beers, the world’s leading diamond exploration, mining and marketing company. India’s diamond production is negligible, but it is the largest consumer of rough diamonds in the world, importing 80% of total global production with an import bill of $15 billion, besides being a hub for processing the stones. De Beers produces over 30 million carats of diamonds per year, 35% of the global production of roughs.
“Anil Agarwal always looks for opportunities to grow,“ said veteran investment banker Nimesh Kampani. “Once he takes a strategic call, he goes the whole hog. He has a sharp mind in spotting good investments. Read More…