Billionaire Nicky Oppenheimer sold 40% of De Beers for $5.1 billion. All of it now fetches $1 billion

Nicky Oppenheimer sold his family's 40% holding in De Beers to Anglo American for $5.1 billion in 2011, ending eighty years of Oppenheimer control over the world's most famous diamond company.

Anglo American is now trying to sell 85% of the same company for about $1 billion.

Bloomberg reported in July that Anglo had selected a consortium led by Gareth Penny, a former De Beers chief executive, as preferred bidder. The Global Diamond Consortium would pay roughly $1 billion for the stake.

On those figures, the 40% the Oppenheimers sold would be worth about $471 million today, by Billionaires.Africa's calculation. They received more than ten times that.

The implied valuation of the whole company has fallen from around $12.75 billion at the time of their exit to $1.18 billion now.

Why the exit looked unremarkable at the time

Oppenheimer was not obviously acting from strength when he sold.

He had never held the sweeping authority his father Harry and grandfather Ernest exercised over Anglo American, and the South African press had dubbed him "Not-yet Nicky" for the length of time it took him to succeed his father.

His statement in November 2011 was carefully unemotional. "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," he said. "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."

He described Anglo as the natural home for the stake, noting it had been a major shareholder since 1926.

What he did not say publicly was what the family had concluded about the market.

The technology that broke the business

Synthetic diamonds were first produced in the 1950s, in experiments by General Electric and others aimed at manufacturing the hardest known material. The early results were low quality and expensive, and the industry dismissed them.

Manufacturing breakthroughs in the 1980s and 1990s cut the cost sharply and raised the quality. By the 2010s, laboratory-grown stones were indistinguishable from mined diamonds to anyone without specialist equipment.

Demand accelerated after the financial crisis as buyers looked for cheaper alternatives, and has increased further through the 2020s. Research by McKinsey found that consumers no longer regard manmade diamonds as inferior to mined ones, and expects the shift to continue as buyers become more price-conscious.

That undermined the mechanism the entire company was built on.

A hundred years of controlled supply

Cecil John Rhodes founded De Beers Consolidated Mines in 1888 and took control of South African diamond output around Kimberley. Ernest Oppenheimer, who had built Anglo American, acquired De Beers and understood that the money lay in controlling sales rather than mining.

He created the Central Selling Organisation, which came to hold an interest in every diamond pipe mine in the world and could raise prices at will by restricting supply.

Under Harry Oppenheimer, De Beers produced 21.4 million carats between 1957 and 1982, generating an average of R1.7 billion a year. His contribution was the "A Diamond Is Forever" campaign, which created the modern expectation that an engagement ring contains a diamond.

The structure began to fail after his retirement, as new mines in Russia, Canada and Australia bypassed the selling organisation. De Beers was forced to abandon stockpiling and controlled release. Synthetics arrived shortly afterwards.

Anglo's problem

Anglo American, which bought the Oppenheimer stake, has been trying to shed De Beers since 2024, when chief executive Duncan Wanblad began restructuring the group to fend off a takeover approach from BHP.

The sale has proved difficult. Anglo initially valued De Beers at $5 billion and has cut the asking price repeatedly to generate interest, taking three impairments on the asset in three years. It most recently carried the business at $2.3 billion, above what the preferred bidder is offering.

The wider industry has moved on. Mining groups have concentrated capital on copper, iron ore and platinum group metals, and diamond producers are no longer regarded as viable standalone businesses.

Nicky Oppenheimer has spent the proceeds elsewhere. He and his son Jonathan established Fireblade Aviation and the Oppenheimer Generations investment vehicle, and the family retains interests in property, conservation and philanthropy across southern Africa. Bloomberg has valued him between $10 billion and $12 billion.

His sister Mary Oppenheimer Slack inherited an equal share of Harry Oppenheimer's estate and holds voting rights equal to his. She appears on no wealth ranking, because her assets sit in family trusts rather than on an exchange.