BHP names packaging guru
MacKenzie as new chairman
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[June 16, 2017]
By James Regan and Sonali Paul
SYDNEY/MELBOURNE
(Reuters) - Mining giant BHP on Friday named successful packaging
executive Ken MacKenzie as its next chairman, handing him the job of
tackling calls to dump its oil business and overhaul the board.
MacKenzie, 53, succeeds Jac Nasser from Sept. 1, after activist
shareholders have challenged the world's biggest miner to revamp its
structure and improve returns.
Investors welcomed the appointment of MacKenzie, who said he plans to
meet shareholders in the coming weeks to listen to their views. He was
seen as one of Australia's most successful chief executives in his 10
years of running Amcor Ltd.
Sacha Sadan, director of corporate governance at Legal and General
Investment Management - the fifth biggest shareholder in BHP's London
listing with 2.48 percent - said he welcomed the announcement of "a
forward-thinking chairman".
"We will continue our discussions on the prospects of the business," he
said.
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Canadian-born MacKenzie presided over a long stretch of prosperity at
Amcor, which makes packaging for food producers, industrial companies
and pharmaceutical firms, that coincided with the end of a boom period
for mining companies.
Hedge fund Elliott Management has fired a barrage of criticism at Nasser
and BHP Chief Executive Andrew Mackenzie since releasing a roadmap of
changes it wants at the company, most notably an exit from U.S. oil and
shale businesses.
Elliott also wants BHP to collapse its dual listing, and earlier this
week called for a board shake-up, blaming long-tenured directors for bad
investments and ill-timed share buybacks.
That could place MacKenzie, who joined BHP's board only last year, in
good standing. Focused on capital discipline, he replaced 75 percent of
Amcor's top 80 managers in his first two years at the company.
On Friday, Elliott said it supported the appointment of MacKenzie as a
"constructive step in bringing much needed change to the direction of
BHP."
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![](../images/061617pics/busine27.jpg)
A handout photo dated April 19, 2017 shows Ken MacKenzie, a former
Australian packaging executive, who has been named as mining giant
BHP Billiton's next chairman. BHP/Handout via REUTERS
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Portfolio managers at another activist shareholder, Tribeca Investment Partners,
were not available to comment.
Nasser has defended the company's $20 billion investment in shale acquisitions
in 2011 against Elliott's criticism.
BHP
also faces a significant juncture in the Samarco mine dam liability saga in
Brazil, which is meant to be settled in September.
In late 2015, a burst dam at Samarco, a joint venture between BHP and Brazil's
Vale, killed 19 people and caused the country's worst environmental disaster as
mud and waste destroyed a village and polluted the Rio Doce river.
Shaw and Partners mining analyst Peter O'Connor said MacKenzie would face a
chorus of shareholders seeking change and rejuvenation of the board.
"He really needs to hit the ground running," he said.
Despite being the world's biggest mining house, BHP has a history of appointing
executives from outside the sector as chairs. Since 1984 only two out of six
chairmen had mining backgrounds.
BHP's shares were little changed on Friday but have suffered a stretch of
underperformance against arch rival Rio Tinto. The stock is down about 18
percent from its 2017 peak in late January.
(additional reporting by Barbara Lewis in London; Editing by Richard Pullin and
Adrian Croft)
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