Global mining group Anglo American said on Tuesday it will raise its stake in the diamond company De Beers to 85 percent after Botswana decided not to exercise pre-emptive rights.
"Anglo American will acquire an incremental 40 percent interest in De Beers for a total cash consideration of $5.1 billion... taking its total interest to 85 percent," a statement said.
Anglo American, which already owns 45 percent of De Beers, the world's leading diamond company, said in November that it wanted to buy the additional holding from South Africa's Oppenheimer family.
But the mining group needed Botswana, which owns a 15 percent stake in De Beers, to forego its right to buy another 25 percent.
South African authorities gave Anglo American a green light to pursue the equity increase in April, and the deal is now expected to be finalised by September, "unless an earlier date can be agreed," the statement said.
"We look forward to strengthening this longstanding and proven partnership which provides a close alignment of interests between Anglo American and Botswana," Anglo American chief executive Cynthia Carroll said.
De Beers is a global leader in the exploration, mining and marketing of diamonds.
Cecil Rhodes, the colonial-era politician and mining tycoon, founded De Beers in 1888. His fortune financed his imperial adventures for Britain, founding the state of Rhodesia which later became modern Zambia and Zimbabwe.
In the early 1900s, Ernest Oppenheimer began buying up mining interests in neighbouring Namibia (then still South West Africa), with American backing.
In 1917 he formed the Anglo American Corporation and by 1920 his Consolidated Diamond Mines had become a force in the mining industry.
By the end of that decade, he had taken control of De Beers Consolidated Mines, and his control of the diamond industry had begun.
His shrewdest move was to establish a central selling organisation that would stabilise sales and keep prices at a premium -- a system which exists to this day and which has allowed De Beers to maintain its tight grip on the precious gem business.