European chemicals: Fixing a flat

This stuff is cheaper to make somewhere else

IT IS always bitter for a chief executive to see his company’s shares spike when his departure is announced. But that is what happened when Lanxess, a German chemicals producer, said this week that Axel Heitmann would be leaving. He has run the business since it was spun off from Bayer, a pharmaceuticals and chemicals group, in 2004. Its shares did well in the early years, and recovered strongly after the financial crisis, but they have slid in the past year. Lanxess says the decision for Mr Heitmann to go was mutual.To replace him, Lanxess brought back Matthias Zachert, a former executive who has recently been overseeing a cost-cutting drive as chief financial officer of Merck, a German pharma firm (unrelated to its American namesake). Investors think well of him: Merck’s shares fell by 10% on the news, as Lanxess’s rose by almost as much.To some extent Mr Heitmann was the victim of his own optimistic spiel. The departing boss, a chemist, talked about escaping the fierce competition in global chemicals markets by spending plenty on research to create high-margin specialty products. He…

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