ZURICH Switzerland's ABB (ABBN.VX) has named one of its top managers as its new chief executive, calming investor fears of a management vacuum after the surprise resignation of CEO Joe Hogan last month and the company's chief technical officer days later.
The news that Ulrich Spiesshofer will take the helm at the world's biggest supplier of industrial motors and power grids on September 15 sent the company's shares 3.5 percent higher at 20.90 Swiss francs by 5.49 a.m. ET, helping to lift the European industrial goods sector index .SXNP by 1.3 percent.
"After the uncertainties related to the resignations of CEO Joe Hogan and the head of research, Prith Banerjee, today's press release is reassuring for investors," said analysts at private bank Notenstein, adding that it was "gratifying" that an internal solution had been found.
Spiesshofer had already been reported to be the favored internal candidate to lead ABB, which operates in about 100 countries and has 145,000 employees. Kasper Rorsted, CEO of German consumer goods company Henkel (HNKG_p.DE), was also seen as a strong contender.
"We said we hoped ABB would be able to find a suitable internal candidate, and they have," said Peter Stenz, portfolio manager at Swisscanto, which holds ABB shares. "Mr. Spiesshofer is very qualified to take over this role."
Hogan, who spent nearly five years as CEO and said he was resigning for personal reasons, will continue as a senior adviser to the board for some months, ABB said.
Spiesshofer currently heads ABB's discrete automation and motion (DAM) arm, which makes motors, generators and robotics, and this year boosted its presence in renewable energy with the $1 billion purchase of U.S. company Power-One Inc PWER.O.
German national Spiesshofer has led DAM since 2009 and is credited with doubling the division's revenues through organic sales growth and acquisitions, and with improved performance and profitability at its robotics unit.
He also managed the integration of Baldor Electronic, the biggest acquisition in ABB's history - bought for $4.2 billion in 2010 as the company sought to boost its presence in the United States.
"I am extremely pleased that the new CEO comes from within the company and brings a solid track record and deep knowledge of the portfolio," ABB Chairman Hubertus von Gruenberg said in a statement.
"Ulrich has been a key force in shaping and implementing ABB's strategy, and the integration of Baldor stands out as a benchmark for successful large acquisitions."