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Mind the gap: Breuer points to Viermetz

Deutsche Bšrse's failed bid for the London Stock Exchange revealed a culture gap between Germany's consensus-oriented management style and the activism of U.S. and British investors, who blocked the offer and forced the resignation of CEO Werner Seifert and supervisory board head Rolf Breuer.

Deutsche Bšrse's failed bid for the London Stock Exchange earlier this year revealed a yawning culture gap between Germany's consensus-oriented management style and the activism of U.S. and British investors, who blocked the offer and forced the resignation of CEO Werner Seifert and supervisory board head Rolf Breuer. So it's fitting that the candidate likely to replace Breuer -- at Breuer's urging -- has plenty of experience on both sides of the Atlantic.

Kurt Viermetz, 66, spent more than 30 years at J.P. Morgan in Frankfurt, New York and Paris, including a decadelong stint as vice chairman in the '90s, before becoming the first chairman of the then­newly merged HVB Group in 1999. That experience should help him heal the rift between the bourse and its Anglo-American shareholders, say people who have worked with him. "He knows the two cultures very well," says Lutz Raettig, chairman of Morgan Stanley's German operations.

Viermetz took a seat on the bourse's supervisory board last month, along with three other appointees: former Goldman Sachs investment banker Richard Hayden, ex­WestLB board member Gerhard Roggemann and German conservative lawmaker Friedrich Merz. Merz is also an adviser to Christopher Hohn, managing partner at Children's Investment Fund (TCI), the U.K. hedge fund that led the revolt over the LSE bid. Viermetz is expected to replace former Deutsche Bank boss Breuer, who has stayed on in a caretaker role, when the board votes on a new chairman. No date has been set for that vote.

TCI declined to comment on Viermetz's appointment, but some observers worry that he is too much of a traditionalist to improve shareholder accountability at the bourse. "If you don't want to change much, then he's the right guy," says one retired Bavarian executive.

Viermetz tells Institutional Investor that the exchange "ought to have a role in the consolidation process in Europe," but he declines to be more specific. He also dismisses suggestions that he is too old. "I hardly have any gray hair," he laughs.

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