Global miner Anglo American has agreed to buy the Oppenheimer family's stake in diamond miner De Beers for $5.1bn (£3.1bn) in cash, taking its ownership of the diamond miner to up to 85 per cent, it said.
Anglo has long been speculated to be considering a deal to increase its stake in unlisted De Beers, which vies with Russia's Alrosa for the title of the world's largest diamond producer, from the current 45 per cent, but the announcement was unexpected.
"Today's announcement marks our commitment to an industry with highly attractive long term supply and demand fundamentals," Anglo American Chief Executive Cynthia Carroll said.
"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."
Anglo American said it had reached a deal with the CHL Group, which represents the Oppenheimer family interest, but added Botswana had a pre-emption right over the CHL stake, potentially lifting the government's ownership to up to 25 per cent.
Anglo said that if Botswana exercised its rights in full, it would raise its own interest in De Beers to 75 per cent.
De Beers, founded by Cecil Rhodes in the 19th century, controls about 40 per cent of the world's rough diamond supply.