Akzo Nobel NV (AKZA) said Chief Executive Officer Hans Wijers will step down from the Dutch company next year after spending almost a decade creating the world’s biggest paintmaker.
The former Dutch economy minister plans to leave at the annual shareholders’ meeting in April, Amsterdam-based Akzo said. He will be replaced by Ton Buechner, who heads Swiss pumpmaker Sulzer AG. (SUN) Sulzer stock fell the most in 12 weeks and Chairman Juergen Dormann said he regrets Buechner’s move.
While Sulzer is left without a clear successor, Buechner’s task at Akzo will be to meet a target of lifting sales to 20 billion euros ($28 billion) over five years. Wijers sold a drug unit and orchestrated the $16.5 billion purchase of Imperial Chemical Industries. With the integration of ICI done, Buechner will likely focus on emerging market expansion, utilizing his experience in Asia, analysts said.
“Akzo is extremely well positioned and financially strong,” said Paul Satchell, an analyst at Collin Stewart. “It’s a question of just running the machine.”
Akzo shares have added 4.3 percent this year for a market value of 11.3 billion euros. U.S. rivals Sherwin-Williams Co. (SHW) and PPG Industries Inc. (PPG) are little changed. The Dutch company rose 0.3 percent to 48.63 euros in Amsterdam today, while Sulzer slipped 5.2 percent to 138.5 francs as of 11:16 a.m.
Buechner, a civil engineer, has been CEO of Sulzer since 2007 and is known to have a hands-on approach to management, according to SNS analyst Michel Veul. Akzo today highlighted the 45-year-old Dutchman’s “proven track record” for strategically developing a company.
Buechner will likely need to make further acquisitions to meet growth targets, analysts and investors including Edwin Slaghekke of Delta Lloyd Asset Management said at the time Akzo’s new targets were unveiled on Sept. 28.
“We understand Buechner has shown a strong operational performance at Sulzer, which is exactly what Akzo needs,” Mutlu Gundogan, an analyst at Royal Bank of Scotland, said in a note.
Buechner, a former Aker Kvaerner engineer in Singapore, joined Sulzer in 1994 and became CEO in 2007, leading the Swiss company through several acquisitions and focusing on growth in emerging markets. In April, it bought the waste-water pump business of Assa Abloy AB (ASSAB) for $1 billion.
Sulzer gets about one-quarter of its 3.18 billion francs in annual sales from Asia and Australia, while Akzo generates 20 percent of its 15 billion euros in turnover in Asia.
Blow to Sulzer
Buechner is leaving Sulzer after the company reported two straight years of falling revenue. Demand is now rebounding from the financial crisis, with first-quarter orders up 16 percent to 917.8 million francs.
Sulzer said it’s starting the search for a replacement for Buechner, who will depart for Akzo in the fourth quarter. His departure comes a year after former Chief Financial Officer Peter Meier said he’d leave to pursue a career elsewhere.
“We’re badly surprised by this announcement,” said Patrick Laager, an analyst at Credit Suisse. “It will be very challenging for Sulzer to adequately replace the CEO position” by the fourth quarter, he said in a note. “His successor will have to demonstrate extraordinary skills in managing a four- division structured company exposed to different industrial cycles.”
Dormann said the company will announce its plans for a replacement in due course. Juergen Brandt was named Chief Financial Officer in September.
Buechner’s departure “is a loss but we always had seen this as a risk, given his great experience, excellent track record and reputation in the market,” Bank Vontobel analyst Fabian Haecki said today in a note to clients.
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