Lanxess lures former finance chief back from Merck for top job
FRANKFURT Jan 27 (Reuters) - Shares in German synthetic rubber specialist Lanxess gained 8 percent on Monday after news its well-regarded former chief financial officer was returning from Merck KGaA to take up the top job at the group.
Shares in drugs and chemicals group Merck, which have gained 30 percent over the last year, meanwhile dropped 11 percent following the news, late Sunday, of the departure of Matthias Zachert, who had been viewed as a potential CEO.
Zachert, who has been working as finance chief at Merck, will replace Axel Heitmann as CEO of Lanxess, who is leaving after eight years.
Zachert is well liked by the capital markets and investors after having helped to set up Lanxess following its spin-off from Bayer.
Lanxess's share price dropped around 5 percent on the day in 2011 when he left the firm, the world's largest maker of synthetic rubber for tyres, door sealants and windscreen wipers.
In response to the switch back, Equinet upgraded its rating on the stock to 'Buy' from 'Hold'.
"Leaving the company for Merck in 2011 was taken by the market very negatively. The change back is very positive for Lanxess, especially in currently rough times," Equinet analyst Nadesha Demidova wrote in a note.
Lanxess is in the midst of an overhaul including job cuts and potential asset sales. It is also looking into takeovers in the medium term to ease its dependence on the automobile sector.
"Investors who remember Zachert from his time at Lanxess in the early days of the post spin-off period may begin to anticipate a period of re-basing market expectations, refocusing the portfolio, and possibly a new cost cutting programme to meet the challenges ahead from new capacity," JP Morgan Cazenove analysts wrote.
Shares in Lanxess have lost around 7 percent since the start of the year. "There are hopes that business can improve under a new CEO," one trader said. (Reporting by Victoria Bryan, Frank Siebelt and Daniela Pegna; Editing by Mark Potter)
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