Ken MacKenzie prefers to be under the radar. The elusive chair of BHP, who apparently is having a 50-foot motor cruiser built on Victoria’s Mornington Peninsula, has been invisible during a bold $64 billion bid for rival Anglo American. He wants the limelight instead to be on his chief executive Mike Henry, as it should. In the past, larger-than-life BHP chairmen have dominated and overshadowed their chief executives. That MacKenzie has a restrained ego is admirable.
“Mike Henry has a very good reputation, and Ken is very careful about these things. They would have thought it through thoroughly and will not be surprised by initial knock backs. But it is a complicated deal, it’s asking Anglo shareholders to take on a fair bit of risk. So, it’s going to be very challenging but maybe not impossible.”
Liebelt, who succeeded Roberts as Amcor’s chair, agrees. He points to the 2009 deal when Amcor paid $2.4 billion to Rio Tinto for its Alcan packaging assets, which made it then the largest group globally in pharmaceutical and healthcare packaging. Amcor manufactures packaging items as varied as aluminium cans to lolly wrappers to cigarette cartons.
When MacKenzie replaced Nasser the biggest problem facing BHP was shareholders’ scepticism at the company’s ability to manage capital well, particularly when executing acquisitions - and for good reason. on a disastrous foray acquiring and investing in shale oil and gas in the US, which began under CEO Marius Kloppers in 2011. BHP would later write down tens of billions on those assets, which would eventually be sold for a fraction of what was paid on that ill-fated bet.
Geoff Healy, BHP’s former top lawyer, says: “BHP has needed growth and has wanted growth for a while now.”“He’s a clear thinker, a good listener, and has a unique capacity to see value, whether that’s in strategy, portfolio or capital allocation. He’s super disciplined in his execution. He’s also low-key.”
After MacKenzie’s arrival at BHP, management intensified their focus on simplifying the portfolio and company structure, while searching for growth - just like what occurred at Amcor. BHP was also pursuing growth that year in metals, such as copper and nickel. It bought Oz Minerals for $US6.4 billion.BHP’s debt levels now sit at $US11.2 billion, which puts it towards the top end of its $US15 billion net debt ceiling cap.
The Anglo deal has been pitched as BHP buying growth, particularly in copper where demand is set to outstrip supply in the next decade. It would also offer significant synergies.
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