NEWSMAKER-BHP head to focus on downturn after Rio failure

LONDON Sun Nov 30, 2008 2:00am EST

LONDON Nov 28 (Reuters) - BHP Billiton (BLT.L) Chief Executive Marius Kloppers will likely use the same pragmatic resolve to grapple with a collapse in metals markets that he did in ditching a mega takeover of mining rival Rio Tinto (RIO.L).

The 46-year-old South African fought hard during a year-long battle to swallow Rio, but ultimately his bid was undone by the world's worst financial crisis since the 1930s Great Depression.

Melbourne-based Kloppers' name was thrust into the media spotlight when he took the helm of BHP Billiton just over a year ago, and weeks later launched the audacious tilt at Rio.

Yet, for such a high-profile person, surprisingly little is written about Kloppers himself, his motivators or his personality.

Publicly, he is the highly-educated and determined businessman with superb organisational skills and a clear vision of what he wants to achieve.

Kloppers also served two years in the South African army, has a taste for Bob Dylan songs, is a vegetarian, and is well-liked by his staff.

He is notorious for abhorring desk clutter, although a company spokeswoman denies claims that pictures of sweethearts and families are forbidden in the workplace.

Now, in the wake of the Rio deal, analysts and investors have widely supported his decision as the right one considering the turmoil on financial markets and Chairman Don Argus has said Kloppers had the full support of the board.

"While this is a big climb-down for BHPB and Marius Kloppers, conditions have indeed changed significantly and we believe this decision shows the triumph of pragmatism over ego and that BHPB is indeed focused on shareholder value," said analyst Kieran Daly at Investec Securities in South Africa.

Some analysts, however, said the deal's collapse put a dent in the reputation of BHP under Kloppers, who has been regarded as a clever strategic thinker since he joined Billiton in 1993.

"We feel neither company has come out smelling roses ... BHPB under new CEO Marius Kloppers I think has misjudged the ferocity of the anti-trust process. I am not sure either side is sufficiently damaged for heads to roll," said analyst Michael Rawlinson at Liberum Capital in London.

Kloppers, a married father of three, launched the plucky Rio move in November 2007 after only six weeks on the job as chief executive. BHP (BHP.AX) was already the largest diversified mining group, with more than 100 operations spanning the globe in 25 countries, but Kloppers was convinced a marriage with Rio (RIO.AX) would reap big synergy dividends.

It would have been one of the world's biggest mergers.

TOUGH DECISION

The former management consultant with a Phd in materials science had assembled extensive research, including scenarios showing the deal would work even in a downturn.

Kloppers told London's Observer newspaper in August he had taken 100 people off their normal jobs to work exclusively on the deal. "This deal is the one with by far the biggest potential. Everything else would be an order of magnitude lower on my radar screen. I would feel a little sheepish if it didn't work out," he said.

At its peak the massive all-share deal was worth $193 billion as a commodities boom sent the share prices of both companies soaring, but it had plummeted in value to about $66 billion when Kloppers called it off on Tuesday.

"Marius moves at a fast clip, which can be challenging at times for others in the organisation trying to keep pace," a South African mining analyst who watched him climb BHP's ladder said earlier this year.

"But his organisational skills are superb and he knows what he wants out of people," said the analyst, speaking on condition of anonymity as his firm does not permit him to talk to media.

Kloppers, now that the Rio deal is dead, will be able to devote full attention to the implications of the unexpectedly steep plunge in mining markets.

One of the key architects in 2001 of the merger of BHP and Billiton that created the world's No. 1 mining group, he has not given up seeking further mergers for the group.

"There will be no doubt some players in this industry will not come out unscathed (from the global economic turbulence) and we will have to continue to look at those opportunities," Kloppers told a conference call after cancelling the Rio deal. (Additional reporting by James Regan in Sydney) (Reporting by Eric Onstad; Editing by Andrew Macdonald)

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