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Danone Separates Chairman's Dual Roles and Names New CEO

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Danone Separates Chairman's Dual Roles and Names New CEO

Danone split its chairman’s dual roles, appointing Emmanuel Faber to chief executive officer while Franck Riboud remains chairman amid declining profit at the world’s biggest yogurt maker.

The separation of the positions will help pave the way for “a smooth succession,” Paris-based Danone said yesterday in a statement. As part of the change, Danone expanded Riboud’s responsibilities as chairman and terminated Bernard Hours’ mandate as co-chief operating officer, a position he’s held jointly with Faber, since 2007.

The new CEO has worked alongside Riboud since 1997. He’s promoted as pressure is rising for Danone to reorganise and seek businesses with better growth prospects. In July, Danone denied a report that it had started a review of its assets, while analysts at Natixis have said the company’s performance makes it vulnerable to a takeover.

“Many will take it positively that Riboud is stepping down as CEO, but less so that the new CEO isn’t really new blood, and that Riboud’s powers as chairman have increased,” James Targett, an analyst with Berenberg, said via e-mail. “Although in reality we think little has changed, it will probably be taken as a positive.”

Future Groundwork

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The rise in e-commerce and digital media both represent bigger disruptions to the industry than the shift from traditional shops to big-box retailing, Riboud said in a preview of an interview to be published today by French newspaper Le Figaro. The management changes are meant to better position Danone to take on those challenges, he said.

Since 1997, Faber has played “a critical role in making and deploying all major decisions,” Riboud said in the statement. “I want to ensure that Danone has everything it needs to lay the groundwork for its future.”

Riboud’s expanded duties as chairman will allow him to work alongside Faber on “major issues” and to represent Danone with leading shareholders, according to the statement. The chairman, who joined Danone 33 years ago, has managed day-to-day operations for more than 18 years.

Danone has struggled for the past two years with problems at its fresh dairy business in western Europe and last year had a recall at its baby food business in Asia, putting pressure on sales and profitability, Sanford C. Bernstein analysts wrote last month.

Bloomberg News, edited by ESM

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