Roche picks Lufthansa boss Franz as new chairman

Reuters
Franz CEO of German air carrier Lufthansa attends the general meeting in Cologne
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Christoph Franz, CEO of German air carrier Lufthansa attends the general meeting in Cologne May 7, 2013. …

By Caroline Copley

ZURICH (Reuters) - Roche has picked Deutsche Lufthansa Chief Executive Christoph Franz to succeed Franz Humer as chairman of its board, filling the top post at a time of change for the world's biggest maker of cancer drugs.

Franz, 53, who has been a member of Roche's board since 2011, will stand for election at Roche's annual shareholder meeting on March 4, the Swiss drugmaker said on Monday.

"Roche is getting a chairman with outstanding personal qualities and an impressive record as head of a major global company," said Humer, who is retiring as announced in March.

"I am sure that his extensive experience, exceptional global network and strong links to Switzerland will be great assets."

While the move is a coup for Roche, whose family owners had expressed a preference for an inside candidate, it comes as the German airline is in the middle of a strategic overhaul to try to cope with rising fuel costs and low-cost competition.

Analyst Fabian Wenner at brokerage Kepler Cheuvreux said Franz fitted the demands of Roche's family owners by being a German speaker with the right cultural connections, but there would be questions over his depth of knowledge of the drugs industry.

The Hoffman-Oeri family, descendents of Roche's founder Fritz Hoffman-La Roche, hold 50.01 percent of the company's shares and have a key say on who is chairman.

Although it will be a non-executive role, the new chairman will have to navigate local politics as Swiss lawmakers hammer out a new corporate tax law, and find his way in a global industry in which some of Roche's top-selling medicines are expected to face competition from cheaper copies from 2016.

One of his toughest challenges may be negotiating with cross-town rival Novartis over the possible repurchase of Novartis's stake in the company, analysts believe.

CHANGE OF GUARD

Novartis has also just appointed a new chairman and the changing of the guard at Switzerland's two biggest drugmakers has fuelled talk that Novartis may finally sell its multi-billion-dollar stake in Roche.

Shares in Roche rose 0.6 percent by 3:56 a.m. EDT to 238.1 Swiss francs, in line with the European healthcare sector index.

In a two-sentence statement, Lufthansa said Franz - who had spent just over three years at the head of the German carrier - had told it he would quit when his current term ends next May, giving him eight more months to press on with his turnaround plans.

Before becoming head of Lufthansa in January 2011, Franz had been installed as CEO of Swiss International Air lines by the German group after it purchased the ailing carrier and was responsible for leading its recovery program.

He still has his home base in Zurich, giving him the Swiss local knowledge and connections in local business and politics deemed crucial for the Roche chairmanship.

Reports suggest Lufthansa to pick an internal candidate to replace Franz rather than bringing in an outsider.

German newspaper Die Welt cited industry sources as saying Carsten Spohr, head of Lufthansa's passenger airlines business and Lufthansa Cargo CEO Karl Ulrich Garnadt as candidates.

Sueddeutsche Zeitung also said Harry Hohmeister - in charge of Lufthansa carriers Swiss, Austrian and Brussels Airlines - could be named.

Franz, who studied industrial engineering and holds a doctorate from Darmstadt Technical University in Germany, has also worked at Deutsche Bahn for nine years.

(Additional reporting by Silke Koltrowitz in Zurich, Ben Hirschler in London and Maria Sheahan in Frankfurt; Editing by Mark Potter and David Holmes)

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