In 2006, the TASE reacted nervously when it was announced that then Teva Pharmaceutical Industries Ltd. (Nasdaq:TEVA; TASE:TEVA) president and CEO Israel Makov was to be replaced by Makhteshim Agan Industries Ltd. (TASE: MAIN) CEO Shlomo Yanai. Market sentiment was very negative about the move.
But there will be no repeat this time around. Dr. Phillip Frost is a veteran Teva executive, who has served as vice-chairman since the pharmaceutical company acquired Ivax in 2006. The transition from deputy chairman to chairman is natural, and Frost knows the global pharmaceutical market well. He is a man who has founded and sold two pharmaceutical companies, and has invested in companies in the life sciences sector. He has known Eli Hurvitz for many years and it is reasonable to assume that the market will interpret Frost's appointment as the logical step in the circumstances.
Teva's byelaws state that the company's headquarters must remain in Israel and that the CEO must reside here. However, the chairman is not required to live in Israel, so Frost can carry on living in Florida and fly over in his private jet to board meetings. Those meeting must also take place in Israel.
Frost will continue living in the US, but he has dismissed out of hand reports that he will move Teva's headquarters to the US. This raises the question whether somebody wanted to scupper his appointment by creating a hostile atmosphere towards Frost by implying that he wanted to turn Israel's largest company into an American corporation.
Over the past three decades Eli Hurvitz has built Teva into the company that it is today: a global corporation and a world leader in generic drugs, which makes huge acquisitions. Hurvitz moved aside many years ago when he handed over the reins of power to Israel Makov and moved upstairs to become chairman.
Even if he had not been smitten by his current illness, at 77, he could not have carried on waving the conductor's baton forever. On this point, it is worth noting that Frost is only four years younger than Hurvitz , while Prof. Moshe Many, who has been acting chairman for the past three weeks, and was today appointed vice chairman, is 81.
The average age of Teva's board of directors is 65, with Makhteshim CEO Erez Vigodman, who was appointed to Teva's board last year, the youngest member at 49.
Published by Globes [online], Israel business news - www.globes-online.com - on March 9, 2010
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