Danone, which has been facing sour profits, is playing musical chairs with its management as Emmanuel Faber replaces Franck Riboud as CEO and Riboud has an expanded role as chairman of the classic yogurt company. Danone management said this shuffle will make for a “smooth transition, ” as Faber and Riboud have worked closely with each other since Faber joined the company in 1997.
The company thought a shake-up was needed amid the growing challenges of e-commerce, slowing demand for its products in Europe and recalls of its baby food in Asia. There was talk of a possible takeover, and the change in management might be a strategy for Danone to stay independent.
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James Targett, analyst at Berenberg, commented on the change, “Many will take it positively that Riboud is stepping down as CEO, but less so that the CEO isn’t really new blood and Riboud’s powers as chairman have increased. Although in reality, little has changed, many will take it as a positive.”
The stock price seemed to show investors were taking it as a positive, as shares in Paris rose 2.2% to the highest level since July 31. Riboud has been at the company for 33 years and has managed Danone’s daily operations for 18 years.