PARIS (Reuters) - Danone DANO.PA veteran Franck Riboud is stepping down as chairman, with Chief Executive Emmanuel Faber taking on both top roles in a move the French group said would ensure continuity in its strategy of focusing on the health-food sector.
Riboud, the son of Danone founder Antoine Riboud, succeeded his late father as chairman in 1996 and is credited with the company’s move towards the health sector with a portfolio ranging from baby food to water, dairy and medical nutrition after ditching beer, biscuit and glass-packaging businesses.
The change takes effect at the start of December, with Riboud staying on as honorary chairman.
The handover had been envisaged when Riboud gave Faber the CEO role in 2014 to prepare for his succession at a time when Danone was suffering from weak sales.
Riboud stayed on as chairman and took on some further responsibilities, such as focusing on the group’s long-term strategy, but those roles were expected to end this year.
“Today’s announcement reflects the culmination of a planned leadership transition process that I initiated for Danone’s top management three years ago and that has allowed the company, under Emmanuel Faber’s leadership, to enter a new development phase,” Riboud said in a statement.
“Combining the Chairman and CEO roles will solidify this momentum, creating a direct bridge between the board and management that will enable the company to continue to execute on its strategy, speak with a unified voice and make decisions in an agile and transparent manner.”
Faber showed his similarity to Riboud when Danone bought organic food producer WhiteWave for $12.5 billion this year, and Faber had also told Reuters in June he wanted Danone to be at the forefront of consumers’ moves towards healthier eating.
LINGERING BID RUMOURS
Danone has been touted as a potential target for suitors or shareholders seeking better returns, given that its profits and sales have disappointed some investors.
In 2005 the French government stepped in and deemed Danone a "protected" industry amid rumours that Pepsico PEP.N could bid for the company.
Faber reiterated on Wednesday his confidence in Danone’s ability to create shareholder value with its current strategy.
“With the full support of the board, we will continue to create shareholder value by remaining focused on our 2020 objectives and driving strong, sustainable, profitable growth across our categories,” Faber said on Wednesday.
Danone shares, which touched record highs this week, are up by about 20 percent since the start of 2017.
Additional reporting by Sudip Kar-Gupta; Editing by David Goodman
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