Glencore’s Glasenberg Seen Eyeing Anglo After Xstrata – by By Matthew Campbell & Jesse Riseborough ( – Feb 4, 2013)

What will Ivan do next? That’s the question likely to percolate amid seaside cocktails in Cape Town this week as mining executives gather for a four-day industry confab of speeches and discreet meetings.

Ivan, as everyone calls him, is billionaire Ivan Glasenberg, chief executive officer of Glencore International Plc. (GLEN) Next month he’s due to close a $37 billion takeover of Xstrata Plc (XTA), creating the world’s fourth-largest mining company. While he isn’t scheduled to address the annual Investing in African Mining Indaba conference, his outsized role in the industry almost guarantees speculation about his next move.

It could be a whopper. Glasenberg, 56, may consider a long- speculated takeover of Anglo American Plc (AAL), according to people familiar with his thinking. The $43 billion mining giant trades at the cheapest level relative to profit of any rival, data compiled by Bloomberg show. Also on his mind: Smaller deals such as a purchase of Eurasian Natural Resources Corp. (ENRC), which has operations in the Democratic Republic of Congo that complement Glencore’s, said the people, who asked not to be identified because the matter is private. First Quantum Minerals Ltd. (FM) is also a candidate, according to Sanford C. Bernstein & Co.

“I don’t see why Glasenberg shouldn’t try this again with another target,” said Paul Gait, a mining analyst at Bernstein in London. “If Glasenberg wants to continue expanding, he has two choices: double down on the Congo via the ENRC or First Quantum route and be a third-world miner, or set up a lower political-risk entity by merging the Anglo and Xstrata operating assets.”

CEO Exits

Representatives for Glencore, Anglo, ENRC and First Quantum declined to comment.

Speculation about Glasenberg has taken on more resonance than usual as his chief rivals in the mining industry have fallen by the wayside. In recent weeks, Anglo CEO Cynthia Carroll and Rio Tinto Group’s Tom Albanese resigned after both left a trail of writedowns at struggling projects and disastrous acquisitions. BHP Billiton Ltd. (BHP) CEO Marius Kloppers is also on the way out, and Xstrata CEO Mick Davis is leaving the combined company after Glasenberg insisted on running it himself and investors revolted over a pay package proposed for Davis and other executives.

That leaves Glasenberg, a commodities trader soon to preside over a company with combined revenue of $209 billion and with a long record of successful deals, as the most powerful man in the industry.

“It reminds me of that Chinese saying, if you wait by the banks of the river long enough you’ll see the bodies of your enemies float past: Marius, Cynthia, Mick, Tom. All gone or going,” said Gait.

Exploiting Prices

The Glencore-Xstrata deal creates a one-of-a-kind firm, combining Glencore’s global trading operations in metals, energy and agricultural products with Xstrata’s coal, copper and zinc mines. The combined group will play a central role in the lives of consumers everywhere, supplying grains in cereal, fuel for cars, cotton for shirts and power for homes, along with a range of metals.

Its reach as a trader means the new company will be able to exploit, not just endure, volatility in commodity prices in a fashion that can’t be matched by its rivals anytime soon.

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