Air Products Hires Rockwood’s Ghasemi as CEO and ChairmanJack Kaskey and Simon Casey
Air Products & Chemicals Inc. hired Rockwood Holdings Inc. Chairman and Chief Executive Officer Seifi Ghasemi to replace its own Chairman and CEO John McGlade and assuage concerns raised by activist investor Bill Ackman.
Ghasemi will take over July 1 and McGlade will retire June 30, Allentown, Pennsylvania-based Air Products said today in a statement. Rockwood in a separate statement named Chief Financial Officer Bob Zatta as interim CEO and said Ghasemi will remain Rockwood chairman until Jan. 1. Air Products rose the most in more than five years, while Rockwood fell.
Ghasemi, who joined Air Products’ board in September, focused Princeton, New Jersey-based Rockwood over 13 years on its two fastest-growing units -- lithium for rechargeable batteries and surface treatments applied to cars and airplanes. Ackman’s investment firm Pershing Square Capital Management LP became Air Products largest shareholder last July and pushed for management changes to boost operating results.
“Mr. Ghasemi’s track record of creating value at Rockwood will likely be well received by Air Products investors who are expecting him to be the catalyst for improved operational performance, profitability and return on capital,” James Sheehan, an Atlanta-based analyst at Suntrust Robinson Humphrey Inc. who rates Rockwood the equivalent of hold and Air Products buy.
Air Products gained 7.5 percent to $130.72 at the close in New York, the most since December 2008. Rockwood fell 3.3 percent to $73.43.
Ghasemi previously worked almost 20 years at BOC Group, now part of Linde AG, giving him experience at an industrial gas business similar to Air Products. The company is the world’s largest supplier of hydrogen and also provides oxygen and other atmospheric gases for oil refining, steel making and other industries.
Ghasemi sold Rockwood’s clay-additives and titanium-dioxide pigment businesses for almost $4 billion to focus on lithium amid rising demand for rechargeable batteries used in laptops, mobile phones and electric vehicles.
“The new strategy at Air Products won’t resemble what Mr. Ghasemi did at Rockwood,” Sheehan said by phone today.
Rather, Ghasemi will focus on operational execution, holding businesses accountable to financial objectives, and a more disciplined approach to capital spending, he said. Pershing invested in Rockwood with the goal of boosting operating margins to a level similar to competitor Praxair Inc., Sheehan said.
Ghasemi’s position as a director will give him a head start in his new role, he said.
“He’s part of the brain trust that has been laying the groundwork for this for the past year,” Sheehan said.
Ackman said in February the industrial-gas producer’s shares will climb to more than $200 after new management is installed and that there’s no reason why Air Products’ operating margin can’t be enhanced. Pershing Square has a 9.7 percent holding, according to data compiled by Bloomberg.
Air Products announced in September McGlade’s planned departure and the addition of three independent directors.
Rockwood didn’t disclose when it plans to appoint a new CEO and chairman. Zatta is probably the leading CEO candidate since he has been executing Rockwood’s strategy since the creation of the company, Sheehan said.