Multinational energy giant BP (NYSE: BP) has settled on a replacement for retiring chairman Peter Sutherland. BP reached across the North Sea and across market sectors to grab LM Ericsson (Nasdaq: ERIC) CEO Carl-Henric Svanberg.
Svanberg may sound like a surprising choice since the energy industry has little in common with Ericsson's telecommunications pedigree. But Svanberg is a proven business leader who took over a fallen giant in 2003 and molded Ericsson into a world leader in mobile infrastructure equipment. Before that, he led lock maker Assa Abloy through more than 45 acquisitions on the way to a global footprint and seven-fold revenue growth in 10 years. Svanberg's management style encourages open communications, and he likes to keep a very long-term focus on business opportunities.
These qualities seem to make Svanberg a good fit for one of the world's biggest enterprises, besides the fact that rival Royal Dutch Shell (NYSE: RDS-A) plucked its own chairman, Jorma Ollila, from Ericsson competitor Nokia (NYSE: NOK) three years ago -- with good results.
BP's sales were a staggering $321 billion over the past four quarters, trailing only ExxonMobil (NYSE: XOM) and Shell among the energy giants. Wal-Mart Stores (NYSE: WMT) is the only outsider to outrank BP in sales. That's a lot bigger than Ericsson's still-impressive $27 billion of worldwide sales. Starting from that big a revenue base, we clearly can't expect Svanberg to add another 10 years of massive growth to his resume.
Svanberg will stay at Ericsson this year, moving to his new strategic guidance role at BP in January 2010. He's filling some very large shoes: Sutherland is a former Ireland attorney general, the first director-general of the World Trade Organization, and a former chairman for investment bank Goldman Sachs (NYSE: GS) unit Goldman Sachs International. Again, it's pretty hard to improve a whole lot on BP's world-class results and leadership. I do feel confident that Svanberg won't be a massive downgrade for the energy titan, though. An exhaustive worldwide recruiting effort led to this guy, after all. It'd frankly be irresponsible of BP's board to settle for anything less than the best of the best.
Svanberg's replacement at Ericsson will be current CFO Hans Vestberg, an 18-year Ericsson veteran who has spent his entire career at the Swedish telecom specialist. He knows the company inside and out, but we don't know if he can match Svanberg's visionary style.
Let's give both Svanberg and Vestberg a chance to prove their mettle. And I wouldn't be surprised to see Svanberg going on an acquisition tear to shape BP in his image.
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