Ian Hannam, often referred to as the “The Rainmaker” (also “the King of Mining”), headed up JPMorgan’s mining business and has advised on most of the major mining deals over the past 15 years, including the $90 billion merger between Glencore and Xstrata in 2012. Nobody has done more mining deals than Hannam.
Now he is back, after a brief hiatus, and is looking to make a splash.
He runs his own boutique investment bank (aptly named Hannam & Partners) and according to sources, he is trying to revive the mega-merger between Rio Tinto and Glencore.
According to reports, the former Captain of the Territorial Army (Hannam) convened with reps from more than 20 different institutional funds in London recently in an attempt to convince them of the merits of a “GlenTinto” mega-merger.
“If not today, this deal will happen sometime in the near future,” Hannam said in his presentation, according to a printed transcript that was seen by Bloomberg. “Glencore is M&A savvy and times deals well. The combination will create a super-major with a diversified portfolio of world-class mining assets.”
The fund managers in attendance included GLG Partners and DE Shaw & Co which each manage over $34 billion in assets globally.
“Rio’s shareholders will demand a material premium,” the presentation reads, under a subheading entitled “Headwinds.” Glencore’s high debt levels and antitrust roadblocks were also mentioned as potential hurdles.
The immediate synergistic benefits of the merger were estimated at $1.8 billion which Hannam says will be realized largely as a result of Rio Tinto being able to sell its commodities through Glencore’s vast trading arm.
Over his 12 year career at JPMorgan, Hannam not only helped sell Xstrata to Glencore in 2012, but he was part of the original team that incubated Xstrata through to its 2002 IPO.
Hannam was also instrumental (along with Mick Davis) in the 2001 merger between BHP and Billiton. He brought Fresnillo public along with Kazakhmys, the Kazakh copper giant; and the list goes on.
Martin Gilbert, the co-founder of Aberdeen Asset Management (FTSE 100 listed company that manages over $550 billion), has said: “Without Ian Hannam, Aberdeen Asset Management would not have survived its 2002-2004 downturn and would not be a FTSE 100 company today.”
Hannam’s commitment to the deal is renowned.
Although most of the literature regarding Hannam is positive, especially when it comes from the people he does business with, he was fined over $700,000 by the UK regulators for “market abuse” in 2012 surrounding a controversy with Heritage Oil. After that he stepped down from his position at JPMorgan.
With Ivan Glasenberg, one of the most accomplished deal men around, and Ian Hannam both trying to get Glencore and Rio Tinto together, I tend to agree with Hannam that the deal is ‘all-but-inevitable’.
Hannam’s firm says they are not advising Glencore or Rio Tinto on this possible transaction.