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Vekselberg victor in Oerlikon power struggle

Shareholders voted to replace Oerlikon chairman Georg Stumpf on Tuesday Keystone

Russian billionaire Viktor Vekselberg has wrestled control of Swiss engineering company Oerlikon after a long battle with its Austrian majority shareholders.

This content was published on May 13, 2008 - 21:30

Vekselberg's holding company Renova holds a 39 per cent stake in the company after striking a deal with Austrian investors Ronny Pecik and Georg Stumpf. Stumpf stood down as chairman on Tuesday.

The company, best known for its industrial coatings and solar activities, has been troubled by boardroom turbulence since a hostile takeover by Pecik and Stumpf's enterprise, Victory, in 2005.

Two years later, chief executive Thomas Limberger stepped down following controversy over his lavish pay packet. Vekselberg briefly joined forces with Victory to sweep up several Swiss companies, but the alliance soon fell apart over strategic differences.

The Russian bought Victory out of Swiss manufacturing company Sulzer last year and soon manoeuvred himself into a position of strength at Oerlikon to force the Austrians to stand down once again.

Renova will now raise its stake in Oerlikon from 25 per cent to 39 per cent while Victory's slice will decrease from 26 per cent to 12 per cent. Shareholders voted on Tuesday to replace Stumpf with Russian Vladimir Kuznetsov as chairman.

At the same time, they voted to change the company's statutes to force anyone taking a stake of one third or higher to announce a public takeover bid to other shareholders.

Company boosted

The conclusion of hostilities will be a boost for Oerlikon, according to Helvea analyst Reto Amstalden.

"People can once again focus on managing the business rather than fighting each other. Renova and Vekselberg have a better reputation with industrialists and investors. This will improve the perception of the company," he told swissinfo.

"The new board will now review the strategy and create a new vision. Many of the business units did not fit together in terms of technology."

The company recorded net profits of SFr319 million ($320 million) last year, short of market expectations. The firm blamed the shortfall on expenses associated with the cost of Swiss textile manufacturer Saurer.

Vekselberg had previously promised to revive the company's fortunes by using his influence to open doors to the lucrative Russian market. Oerlikon opened its Russian office in Moscow in April.

"His Russian connections are significant and there is a good chance that they will pay off, but this will take years rather than months to materialise," Amstalden added.

Renova and Victory caused shockwaves in Switzerland's manufacturing industry with their aggressive acquisition drive.

Their tactics of secretly stockpiling shares in companies triggered a change in Swiss takeover regulations last year.

swissinfo, Matthew Allen

Oerlikon

Oerlikon, known as Unaxis until its 2005 takeover and Oerlikon-Bührle before that, is a stalwart of the Swiss manufacturing sector.

The company is active in solar technology, thin film coating, vacuum systems, textile machines, drive systems and precision components.

Its high-tech applications can be found in cars, satellites, machines, textile products, solar panels, MP3 players and beamers.

Some 70% of the global production of CDs and CD-ROMs is manufactured on the company's equipment.

It has more than 19,000 employees at 170 sites in 35 countries.

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