Ericsson said its chief executive, Carl-Henric Svanberg, was stepping down to become chairman of BP Plc in a surprise appointment that ends the oil major's fraught search for a successor to Peter Sutherland.

Svanberg's successor at the Swedish telecoms equipment firm will be its chief financial officer Hans Vestberg, who said he planned no major strategic changes. Analysts welcomed Vestberg's promotion.

BP Chief Executive Tony Hayward told Reuters Europe's second-largest oil company would benefit from Svanberg's experience in emerging markets and in dealing with governments as it shifts the focus of its downstream business eastwards.

Svanberg, who has been CEO at Ericsson since 2003, will take over from Sutherland next January in what will be his first oil industry role.

Svanberg enjoyed a largely successful tenure at Ericsson, analysts said. However, his position had been in doubt since confidence in management was hit by a profit warning in 2007 which analysts said came shortly after a bullish investor presentation by the company.

(His departure) has been pretty much rumored for the past year and a half, since the 2007 profit warning. Meanwhile Hans Vestberg has proven himself a sensible CFO, Alexander Peterc, analyst at Exane BNP Paribas, said.

Investors who exited the stock after the warning may now review that decision.

Many investors said they would never look at Ericsson until there was management change, one dealer said.

But Richard Windsor, global technology specialist, at investment bank Nomura, said he did not think Svanberg was pushed. I think the timing has caught Ericsson a little bit on the hop, he said.

Ericsson shares were down 0.7 percent at 76.20 Swedish crowns at 7:41 a.m. EDT, compared to a 1.1 percent decline in the DJ Stoxx European telecom equipment makers index <.SX8P>. BP shares were down 0.4 percent, outperforming a 1.0 percent drop in the DJ Stoxx European oil and gas sector index <.SXEP>.


Vestberg told a press conference he felt well prepared for the CEO job, having worked in most parts of the business, which is focused on making mobile phone networks.

The company also provides telecoms services such as consulting and co-owns the world's no.4 handset maker, Sony Ericsson, with Japan's Sony Corp <6758.T>.

BP's Hayward said Svanberg's experience in dealing with governments would be valued.

Governments are big buyers of telecoms equipment, while regulatory issues are also a big driver for the sector. As governments award oil and gas licenses, and decide taxes, good government relations are similarly essential for oil companies.

Svanberg's emerging markets knowledge is also expected to help as BP shifts the focus of its refining and marketing business toward Asia.

In downstream, the challenge is how to reposition the capital employed from the mature markets into the immature, growing markets and that's something that the telecoms industry has managed to do very successfully over the last decade or so, Hayward told Reuters in a telephone interview.

In terms of managing that transition, I think Carl-Henric will have a hell of a lot to offer.

BP's larger rival Royal Dutch Shell Plc also tapped the telecoms sector when its chairmanship came up for grabs, appointing Nokia Chief Executive Jorma Ollila in 2006.


Svanberg's appointment ends a fraught recruitment process at BP.

Sutherland had expected to stand down late last year or earlier this year, and BP initially selected miner Rio Tinto's then chairman Paul Skinner, a former Shell executive, to fill the job.

However, Skinner withdrew following investor unease over Rio's plan to sell $19.5 billion in assets and bonds to Chinese state-owned aluminum group Chinalco, BP sources said.

Skinner stepped down from his Rio role in March and earlier this month Rio dropped the Chinalco deal.

That reverse poisoned the BP role for some potential candidates, especially UK businessmen, some executives said, and limited the options open to the company, which had hoped to select someone with oil industry experience.

Sutherland was a popular chairman, whose previous experience as an European Union Commissioner and head of the World Trade Organization brought BP valuable international contacts.

His tenure is best remembered for a spat with former CEO John Browne, over Browne's desire to extend his role beyond BP's normal retirement age of 60 years.

Svanberg will join the BP board in September and, once he becomes chairman, will be based in London and devote the majority of his time to BP business, BP said.

He will also remain on the Ericsson board.

(Additional reporting by Mia Shanley in Stockholm and Georgina Prodhan in London; Editing by John Stonestreet)