Danone board to meet Wednesday over management issues: source

[October 18, 2017]   By Dominique Vidalon

PARIS (Reuters) - Danone's board will meet on Wednesday to discuss senior management issues, a source close to the matter said, amid media reports that the French multinational's chairman will stand down.

The source declined to give further details about the meeting, which is expected to start in the early afternoon.

French newspaper Le Monde reported on Tuesday that Franck Riboud, 61, would stand down and hand over to chief executive Emmanuel Faber, 53, who will become both chairman and CEO. Danone declined to comment on the report.

Danone, the world's largest maker of yoghurt and owner of the Evian water brand, is the latest consumer goods company to come under investor pressure to improve results as it tries to hit profit margin and sales growth targets it recently set.

Riboud, who took over from his late father Antoine in 1996, handed the CEO role to Faber in 2014 to prepare his succession at a time when Danone was facing 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.

Le Monde said Riboud would hand full responsibility for Danone to Faber, who is increasingly focusing Danone on health-oriented products.

Riboud is credited with turning Danone's focus to the health sector with a portfolio ranging from baby food to water, dairy and medical nutrition, having over the years ditched the beer, biscuit and glass-packaging businesses.

Faber took that agenda further in July when Danone bought U.S. organic food producer WhiteWave. The $12.5 billion acquisition was an attempt to respond to consumers shifting towards healthier eating.

Yoghurt by French foods group Danone are seen in this photo illustration shot in Strasbourg, April 15, 2015. REUTERS/Vincent Kessler/File Photo

Danone has also recently been touted as a potential target for suitors or shareholders seeking better returns, given that its profits and sales have disappointed some investors.

The absence of a large, controlling shareholder at Danone has also made it a potential takeover target.

In August, Corvex Management bought a 0.8 percent stake in Danone, a move that followed similar steps at Nestle and Procter & Gamble <PG.N>.

Faber told Reuters in June that Danone was "no more and no less" vulnerable than usual to a possible takeover bid.

French Finance Minister Bruno Le Maire told a conference in August that France would not let "predators attack companies that are our country’s economic heritage".

In 2005, the French government stepped in and deemed Danone to be a "protected" industry amid rumors that Pepsico could make a bid for the company.

On Tuesday, Danone beat third-quarter sales forecasts, driven by a strong rise in sales of baby milk formula in China.

(Reporting by Dominique Vidalon; editing by Sudip Kar-Gupta and Adrian Croft)

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