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James Moore: Mick Davis won't be worried to jet off early

James Moore
Tuesday 16 April 2013 19:01 EDT
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Outlook So Mick Davis has left the building a bit earlier than expected. The £30m in retention bonuses a supine board planned to kick his way following the marriage of his Xstrata with Ivan Glasenberg's Glencore almost became the straw that broke the back of this unlovely Bactrian when investors cried foul.

But you don't need to be too concerned about his future. His pay-off amounts to nearly half that, and he'll also get enough flight time on the corporate jet to cover trips to those parts of the world that are rich in resources but poor in finance and expertise if (as expected) he seeks to create a second mining conglomerate from the ground up.

That the pay-off was handed over six months early came as no surprise. Mr Glasenberg , below, was forced to offer more than he wanted as a dowry to Xstrata shareholders in the wake of the investor revolt which that retention package helped to catalyse.

But after he'd blinked once, the investors caved in (as they always do) and Glenstrata was born. The tie-up is still technically being called a merger – but this wedding is a takeover in anyone's book.

And it's a takeover in which Mr Glasenberg is the unabashed winner. The price for him sweetening the deal was the exit of Mr Davis, whose deputy he was originally going to be. Who knows, it might ultimately have ended up like that anyway.

As it is, a deal over the price of copper and the sale of a Peruvian project were enough to buy off the Chinese, who provided the last remaining impediment to the creation of this $76bn natural resources titan, which combines trading and a huge slug of production under the same ownership and will have unparalleled clout.

All the other regulators kowtowed a long time ago and we're now stuck with it. For better or for worse, in sickness or in health.

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