Danone said Monday it had dismissed its chairman after months of complaints from foreign shareholders about the French food and drinks giant's underperforming share price.
Activist investors took aim at Emmanuel Faber, who became Danone's boss in 2017, and his management team, demanding his departure and a revamp at the top as the company struggles to plot a post-Covid recovery strategy.
Danone is a household name in France mostly for its eponymous yogurts and other dairy products, but its business portfolio also includes waters such as Evian and Volvic, baby foods and medical nutrition.
Last month, US fund Artisan Partners said it had built up a sizeable stake in Danone in the hope of prompting strategy and personnel changes, weeks after another hedge fund, London-based Bluebell Capital, revealed it had also acquired shares to force changes.
During Faber's reign at Danone -- which is one of Europe's biggest food companies and in the world top 20 -- it added a mission statement to its statutes saying it would combine profitability with social responsibility and environmental targets.
- 'Irritated markets' -
"We want finance to serve the economy, and the economy to serve the people," Faber once said, a view that one unnamed analyst said "certainly irritated financial markets a bit".
Faber's departure prompted a flurry of media and social media reactions, with concerned commentators wondering about the future of French capitalism and attempts to be more socially responsible in a globalised world of finance.
"Emmanuel Faber defeated by the law of the markets," read a headline in left-leaning daily Liberation which said Faber had been "brutally dismissed".
Le Monde called his departure "another thunderclap in the heart of French capitalism".
But despite Faber's professed care for social issues, Danone in November announced plans to lay off around 2,000 of its 100,000 employees worldwide as part of a project to "reinvent" the company -- and stem a decline in the share price which dropped by about a third in 2020.
Sales fell 6.6 percent last year to 23.6 billion euros ($28.1 billion) in the context of Covid.
- 'Lot of push' -
"Emmanuel Faber leaving is connected with the negative results presented by Danone in their annual results," said Maria Mascaraque, an analyst at Euromonitor, a market research firm.
"There has been a lot of push coming from key Danone stakeholders and I think the reason is that other food competitors reported positive sales in their annual results," she told AFP, citing the food sector's world leader Nestle as an example.
"Unfortunately, the financial performance of Danone is not consistent with the quality of its assets," Artisan wrote to other shareholders in February, adding that it had spent some $1.6 billion to take a stake of over three percent in the firm to make it the third-largest shareholder.
Artisan called for a spinoff of Danone's bottled water division and which suffered a steep sales decline as Covid restrictions hit restaurants and cafes, the main outlets for the business.
Ahead of Monday's move, investors had already split Faber's dual roles of both board president and chief executive to improve accountability.
- 'Desires for change' -
While searching for a replacement "with an international profile", Danone named a trio of top managers to head the firm.
In a statement, Danone's board said it still "believes in the necessity of combining high economic performance and the respect of Danone's unique model of a purpose-driven company".
The Paris stock market welcomed Faber's departure, with Danone shares trading close to four percent higher in early afternoon Monday, making it the strongest riser among French blue chips.
The share jump was "proof of the desires for change and has built back investors' confidence", said Mascaraque, adding that "decisions need to be made on what are the priorities for the future growth of the company".
Brokers Oddo BHF upgraded their view of the stock to "neutral" from "underperform", saying Faber's departure would diminish the group's "management discount" and "open the path towards a more constructive approach".