* Sandvik names Olof Faxander new CEO from Feb 1, 2011
* Replaces Lars Pettersson who will leave group
* SSAB says EMEA unit head Lindqvist to replace Faxander
* Sandvik shares rise, SSAB down after Outokumpu warning
(Recasts, adds company, analyst comment, share price reaction)
By Johannes Hellstrom
STOCKHOLM, Dec 14 (Reuters) - Swedish engineering group Sandvik AB named the top executive of steel maker SSAB AB as its CEO on Tuesday as it looks to recapture ground lost to rivals during the downturn.
Olof Faxander will take up his post at the maker of tools, mining and construction equipment and speciality steels on Feb. 1, replacing long-time CEO Lars Pettersson who along with a number of leading executives had been due to retire in the near term.
Pettersson led Sandvik for nearly a decade but came under fire as the company slipped into the red in the wake of the global financial crisis, in sharp contrast to domestic rival Atlas Copco AB.
"There has been a question mark over not perhaps Pettersson personally, but the business model that Sandvik has and how it performed during the crisis," said Magnus Axen, analyst at brokerage Evli. He said this had hurt Sandvik's share price relative to rivals.
"So this (the appointment of a new CEO) could be the first step in seeing that share price discount being removed again."
Shares in Sandvik were up 1.5 percent at 129.10 at 1001 GMT against a flat European industrials index, having hit a three-year high of 129.70. Its shares are up 49 percent so far this year against a rise of 63 percent for Atlas Copco.
Sandvik made a 1.4 billion operating loss in 2009 against a 9.0 billion profit for Atlas Copco. It has continued to underperform during this year's recovery.
A second analyst said that whereas SSAB had moved up the value chain under Faxander, Sandvik remained vertically integrated, producing steel and higher-value added products.
"You can wonder whether it will remain so under Faxander," the analyst said.
SPECIALITY STEELS
Faxander oversaw SSAB's $7.7 billion purchase of Canadian-U.S. steel pipe maker Ipsco in 2007, massively expanding the firm's global footprint. The deal was one of the biggest acquisitions ever by a Swedish company.
SSAB shares were down 2.0 percent at 90.70 crowns, reflecting a profit warning by Finnish stainless steel maker Outokumpu.
The global downturn hit both Sandvik and SSAB hard and both dipped into the red last year.
Demand for the specialty steels made by both evaporated and Sandvik had problems shifting its tools and mining equipment as industry cut back on production.
The outlook for industrial firms is now much brighter, thanks to growth in emerging markets and strong mining sector activity.
But recovery in Europe remains fragile, overshadowed by worries that spending cuts to address huge budget deficits will crimp growth. Outokumpu's profit warning underlined these concerns.
Sandvik is also facing the departure of many of its top executives, who are due to retire in the near future, including the head of its Materials Technology and Tooling units.
"The board thinks, naturally, that an incoming CEO should have the chance to pick his own team, and that is an idea I completely agree with," outgoing CEO Pettersson told Reuters.
SSAB, which makes specialty and hardened steels, appointed Martin Lindqvist, head of its largest business unit SSAB EMEA, to replace Faxander.
"I think that Martin Lindqvist is a natural choice as he knows the company very well as a result of having been head of finance and his business unit head experience," said one analyst who declined to be named. "So I don't think this is anything dramatic for SSAB." (Reporting by Anders Zachrisson and Sandra Jansson; Editing by David Holmes)