http://online.wsj.com/home-page
With Xstrata Veterans, He Looks to Build Another Powerhouse
LONDON—After building two mining giants in the past two decades, can Mick Davis start from scratch and do it again?
Mr. Davis, 56 years old, is entering the fray again just as companies such as BHP Billiton and Anglo American PLC look to sell off unfavored assets. He is looking to build another mining powerhouse after Xstrata PLC, the Anglo-Swiss company he led for a decade, was taken over last year by Glencore PLC, headed by fellow South African Ivan Glasenberg.
The deal had been conceived initially as a merger of equals, with Mr. Davis slated to be its chief executive. But after resistance from crucial Xstrata shareholders, Mr. Glasenberg recast the deal as a takeover and seized the top job.
Mr. Davis’s new venture, X2 Resources, has raised as much as $4.8 billion from several investors, including commodities trader Noble Group and private-equity firm TPG.
His re-emergence alongside a team of mostly Xstrata veterans comes amid a slump in commodity prices that has put pressure on mining bosses to trim their portfolios.
“We think there is a credible opportunity set for us to invest in,” Mr. Davis said during his first interview since leaving Xstrata in May 2013.
“We’re in a cyclical downturn now that gives rise to opportunities we think are worthwhile capitalizing on,” he said. “In 2001, when we started Xstrata, no one believed there would be growing [commodity] demand.”
Including debt financing, Mr. Davis could have access to a war chest of as much as $16 billion, said a banker who has assisted Mr. Davis with fundraising.
Mr. Davis has a track record of building sizable mining companies through timely acquisition. He helped to build and then float Billiton PLC as its chief financial officer after it bought Royal Dutch Shell ’s mining assets in 1994. He then helped orchestrate its megamerger with BHP in 2001 before leaving for Xstrata, a minnow that became the world’s fifth-biggest mining company after a string of large deals.
Repeating such success could prove tricky. Despite recent price declines, the commodities boom since around 2000 has inflated asset values. Many industry participants say chances to buy good-quality mining assets are scarce.
For the rest of this article, click here: http://online.wsj.com/articles/mining-force-mick-davis-digs-in-again-1413751393