OC Oerlikon Corp., a Swiss maker of textile machinery and car gears, appointed Brice Koch of ABB Ltd. as its new chief executive officer, ending investor concern over leadership of the company after former chief Michael Buscher left abruptly in March.
Koch brings industrial experience to Oerlikon, which was restructured after coming close to bankruptcy in 2009 and is now entering a growth phase. Koch, who joined ABB’s executive committee in 2010, has led the company’s power systems division since March 2012, where he oversaw the stripping out of lower-margin engineering, procurement and construction operations in some countries to improve profitability.
“We advise investors to add to positions on this positive news,” Patrick Laager, an analyst at Credit Suisse AG in Zurich, wrote in a note to clients. “Today’s announcement is removing a major part of the uncertainty in the investment case which has hindered the stock to outperform the wider sector since the departure of former CEO Michael Buscher back in March.”
Oerlikon shares touched a five year high on the news. Koch will report to Tim Summers, Chairman and delegate of largest shareholder Russian billionaire Viktor Vekselberg’s Renova Group. Earlier in his career, Koch, a French citizen, held roles including head of ABB in China and North Asia and head of ABB’s Marketing and Customer Solutions, Oerlikon said today in a statement. Koch holds a Ph.D in material science from the Swiss Federal Institute of Technology, Zurich.
“We are looking for someone who can take the company forward to the next level, with a focus on Asia,” Summers said in a phone interview. “We are looking forward to working with Brice and hearing his thoughts on the future direction of the company.”
Oerlikon shares rose as much as 3.9 percent to 13.20 Swiss francs at 11:26 a.m. in Zurich, giving the company a market value of 4.3 billion francs ($4.7 billion).
Buscher, who decided to leave Oerlikon March 14 after three years at the helm, later became head of German brake-maker Knorr Bremse. Fedier, who has been interim CEO since his departure, will resume the role of chief financial officer when Koch joins in the first quarter, Pfaeffikon, Switzerland-based Oerlikon said in the statement.
“There is a risk that investors may have concerns that CFO Juerg Fedier could leave the company,” Laager wrote.
Summers said he is confident that Fedier will stay and form a “very strong team” with Koch.
“An orderly succession process” has been initiated at Power Systems, which Koch will support before leaving the company, Zurich-based ABB said in a statement. ABB plans to have a permanent successor in place by the end of the first quarter of 2014, the company said.
ABB shares declined 0.8 percent to 22.99 francs in Zurich, giving the company a market value of 53 billion francs.