One of the world’s most high-profile dealmakers helped to broker talks between Ivan Glasenberg and Mick Davis that paved the way for the possible $88bn merger between Glencore and Xstrata.
Michael Klein, who exited the banking industry in 2008 when he resigned from the role of Citigroup’s head of investment banking, helped mediate between the two veteran chief executives by acting as an independent go-between, three people familiar with the deal talks said. “He was an honest broker,” one of the people said.
Another person familiar with the talks said Mr Klein acted at times as a “sounding board”, helping both executives discuss potential ideas.
Mr Glasenberg and Mr Davis have a reputation for being uncompromising and have gone from being close friends in their home country of South Africa to formidable business rivals.
The former Citi banker, still in his 40s, was picked in particular because the two chief executives wanted someone who could play a neutral role, having never advised either Glencore or Xstrata.
Mr Klein left the US bank in 2008 with an unprecedented $42m pay-out. He went on to advise Bob Diamond, Barclays’ president, on the bank’s $1.75bn acquisition of Lehman Brothers’ US business, a role which earned him $10m.
He also advised Gordon Brown, then UK prime minister, on the government’s £400bn bank bail-out. Since leaving Citi, he has been one of the top freelance rainmakers in the City of London.
“Michael is a unique animal, he is one of the smartest guys you will ever meet,” said one banker who has worked with Mr Klein. “He understands investment banking products across the complete spectrum and can bring clever solutions to thorny problems.”
The Wharton School of Business graduate joined the mergers and acquisitions group of Salomon Brothers in the mid-1980s and quickly climbed the ranks. He led the firm’s private equity group and the expansion of its European investment bank, through to its merger in May 2000 with Schroders, the UK merchant bank.
He went on to hold a number of senior management roles at Citi, which bought Schroders Salomon Smith Barney. His affiliations since leaving the bank have been diverse, from advising the prime minister of Turkey on investments to working with the US National Football League.
In addition to Mr Klein, Xstrata is being advised by JPMorgan, Deutsche Bank, Goldman Sachs and Nomura. Morgan Stanley and Citigroup are advising Glencore. Linklaters and Freshfields are providing legal advice.
Glencore and Xstrata declined to comment. Mr Klein could not be reached for comment.
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