The mid-sized chemical company Lanxess is in the midst of a much-needed and radical overhaul of its business, and its chief executive said its strategy has been given a shot in the arm in the form of an investment by Warren Buffett.
Mr. Buffett took his stake just as Ken Griffiths, head of the hedge fund Citadel increased a short position on Lanxess shares and markets are now watching to see which of the two investment gurus turns out to be correct in their assessment of the company. At first glance it appears Mr. Buffett’s optimism has won out: Citadel has already begun unwinding its position.
Lanxess Chief Executive Officer Matthias Zachert said Mr. Buffett’s investment is a clear sign that he should carry on the path he has already chosen. “When he invests, that means: He is committed to the company in the long term and has deep confidence in his business model,” he said.
Cologne-based Lanxess was spun off from Bayer in 2004, and is just emerging from a crisis.