General Mills promotes COO to CEO post

By Nichola Groom

LOS ANGELES (Reuters) - General Mills Inc. (GIS.N), the maker of Cheerios cereal and Progresso soup, promoted President and Chief Operating Officer Ken Powell to the chief executive post on Monday.

Powell succeeds Steve Sanger, 61, who had served as chairman and CEO since 1995. Sanger will continue as chairman through the end of the current fiscal year, which ends in May.

Powell, 53, is a 28-year veteran of Minneapolis-based General Mills. In addition to his most recent post, he has also served as CEO of the company's Yoplait yogurt division, president of its Big G cereals unit and CEO of Cereal Partners Worldwide, its international cereal joint venture with Nestle SA (NESN.VX).

"From a continuity perspective, it's good because you get somebody who is coming from the inside and somebody who has worked with a lot of the businesses," said Morningstar Inc. analyst Gregg Warren.

He especially pointed to Powell's work with the Cereal Partners joint venture with Nestle, which has helped expand General Mills' international reach.

"Having somebody who has an established relationship with Nestle is probably not a bad thing," he said.

Sanger became CEO of General Mills as it was splitting in two by shedding restaurant brands including Red Lobster and Olive Garden. Those chains are now the top brands at Darden Restaurants Inc (DRI.N).

The company said that during Sanger's tenure as CEO, sales more than doubled to over $12 billion in the latest fiscal year. Much of that growth stemmed from the company's 2001 purchase of Pillsbury from British drinks group Diageo Plc. That deal brought in businesses such as Old El Paso Mexican foods, Progresso soups, Totino Pizza, and of course, Pillsbury's refrigerated dough unit.

For a couple of years, the food maker struggled with the integration of Pillsbury. In recent years, however, General Mills has rebounded from those issues and posted better-than-expected results in its latest quarter thanks to a move to reduce the size of cereal boxes and charge consumers more per ounce.

Unlike other food companies that have looked outside for a chief executive in recent years -- including ConAgra Foods Inc (CAG.N) and Sara Lee Corp (SLE.N) -- General Mills is not in need of a major overhaul, Warren said.

"Aside from the Pillsbury distraction, I think they've done a good job with the businesses they had," Warren said.

Shares of General Mills little changed, down 14 cents at $58.35 in afternoon trading on the New York Stock Exchange.

(Additional reporting by Brad Dorfman in Chicago)