Lanxess Stock Lifted by CEO Change

FRANKFURT-- Lanxess AG shares jumped Monday on news that its chief executive Axel Heitmann will leave the chemicals company at the end of February, to be replaced by Matthias Zachert, currently chief financial officer at Merck KGaA.

Mr. Zachert's appointment marks his return to the company where he served as CFO from 2004 to 2011. He will take over by May 15.

"Lanxess is facing significant challenges, for example in terms of market capacities and business portfolio," Lanxess said late Sunday. "Therefore, the supervisory board believes it is the right time to hand over responsibility to a new leadership in order to overcome these challenges," it said.

Lanxess stock gained 9% in early trading Monday while Merck shares fell 11%.

UBS analysts said Mr. Zachert had a "resounding reputation" in capital markets.

"We deem Mr. Zachert extremely fit to manage the complexity of chemical supply chains, use modern data systems to drive pricing and cash flow, spot cyclical trends early and prudently allocate capital," UBS said.

Lanxess CFO Bernhard Duettmann will be responsible for CEO duties until Mr. Zachert joins.

Mr. Zachert's departure is likely to be a blow for Merck. In his three years there he played a key role in restructuring and making cost-cuts that led to a 30% share price gain last year.

Lanxess shares, on the other hand, have been under selling pressure for some time. Ahead of Monday's gains they had fallen more than 55% in the past year.

UBS described the management change as "better late than never."

Merck CEO Karl-Ludwig Kley said Mr. Zachert's "transparent capital market communication has clearly helped boost investor trust in our company." Merck's board will decide on a successor "in due course," it said.

Write to Neetha Mahadevan at [e-mail]

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