On the Move: Marius Kloppers

BHP Billiton is rumoured to be on the verge of a spending spree - and its new CEO has a fondness for doing deals.

by World Business
Last Updated: 23 Jul 2013

When Marius Kloppers takes up his position as the new chief executive of BHP Billiton - the world's biggest mining company - on 1 October, his first task may be to make the company even bigger. Rumours have persisted for months that BHP is contemplating a spending spree, with its sights set possibly on rival Rio Tinto, US aluminium miner Alcoa or Canadian aluminium group Alcan. Analysts say that the BHP board is unlikely to make any big decisions on the company's future before Kloppers arrives in post.

His appointment means that by the end of the year, the world's big three diversified mining companies will have changed chief executives. Cynthia Carroll left Alcan to become CEO of Anglo American in March, and Tom Albanese took over at Rio Tinto in May. Aged 44, South African-born Kloppers joined Billiton in 1993 ahead of the merger with BHP, and played a key role in the creation of the group's aluminium empire. His most recent position was as head of the group's most profitable division - non-ferrous metals, which includes aluminium, copper, tin and zinc.

The decision to appoint Kloppers led to a rise in BHP's share price, indicating that investors were pleased by the prospect of a smooth succession and a new CEO with a reputation for a fondness for deals. He will take over the reins as the company enjoys rude health: net profits during the second half of last year jumped by 41% to £6 billion, thanks largely to strong demand for minerals, especially from China. In addition to facing key decisions on possible takeovers, Kloppers will also have to determine the extent of BHP's further involvement in mineral-rich but politically unstable areas of the world, such as central Africa and central Asia.

Chairman Don Argus says: "We are in a time of considerable change in our industry with the emergence of new markets and sources of supply. Marius' vast experience in the resources sector and his demonstrated strategic capabilities provide the skills we need in the next leader."

CV AT A GLANCE ...
- Education
1990: PhD, materials science, MIT
1991: MBA, INSEAD
- Career
1992: McKinsey
1993: Joins Billiton
1997: Marketing director, aluminium
1999: CEO Samancor
2001: Chief marketing officer, BHP Billiton
2003: Chief commercial officer
2006: Executive director and group president, non-ferrous metals
2007: CEO

IN COMPARISON ... Alain Belda, CEO, Alcoa

When Alcoa's Alain Belda launched a $33 billion hostile takeover bid for rival Alcan in May, he came up with an interesting line on how to approach such a high-risk move. "You have to be bigger than the hole you can fall in," he said.

In the end, Alcan blocked the hole before Alcoa could get close: it rejected the bid outright, citing a range of objections. Describing Alcoa's offer as "inadequate", Alcan said: "It is clear to us that Alcan and Alcoa have fundamentally different approaches and track records in creating shareholder value." It then added that it is "continually evaluating all options", hinting that it would be interested in talking to other potential suitors.

A merger between the two companies would create the world's largest aluminium producer, ahead of Russia's Rusal, which acquired fellow Russian producer Sual last year for £30 billion. Alcoa has been in talks with Alcan about a tie-up for several years, arguing that such a move would create annual savings of $1 billion and would create significant cashflow for new projects.

Its decision to launch a hostile bid was interpreted by many as a bid to avoid being taken over itself. Rio Tinto and BHP Billiton have been mentioned as potential bidders for either Alcan or Alcoa, and as competition in the aluminium industry remains intense, it seems that further consolidation is likely in the medium to long term.

CV AT A GLANCE ...
1979: President, Alcoa Aluminio, Alcoa's Brazilian affiliate
1994: Executive vice-president, Alcoa
1995: Vice-chairman
1997: President and chief operating officer
1999: President and CEO 2001 Chairman and CEO

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