Reckitt picks PepsiCo executive as CEO, going outside for first time

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Reckitt Benckiser Group logo on the website homepage. Image: Shutterstock

Consumer goods group Reckitt Benckiser has picked PepsiCo executive Laxman Narasimhan as its next chief executive, becoming the latest industry heavyweight to turn to a company outsider to tackle faltering growth and new media-savvy rivals.

Narasimhan, PepsiCo’s global chief commercial officer, is the first external candidate to be appointed as CEO at Reckitt since the maker of Durex condoms, Nurofen tablets and Dettol cleaners was formed in 1999.

The 52-year-old takes over as CEO on Sept. 1, replacing Rakesh Kapoor, 60, who has led Reckitt for more than eight years and said in January he would retire this year.

Analysts welcomed the appointment, saying the new CEO would inject a fresh perspective to a company facing industrywide challenges to growth, though some said it raised doubts about the fate of Reckitt’s restructuring plan.

‘FRESH PERSPECTIVE’

Jefferies analyst Martin Deboo questioned why a company already smaller than rivals Procter & Gamble and Unilever wanted to “descale itself”, which could hobble its ability to compete in emerging markets.

Reckitt shares were up 1.6% in afternoon trading on the London Stock Exchange.

At least three analysts welcomed Narasimhan’s appointment.

“Narasimhan’s strategic and leadership background make him a strong fit for Reckitt. We believe he will bring a fresh perspective to both the business and to investors,” Morgan Stanley analyst Richard Taylor wrote in a note.

Narasimhan led Strategy, Global Category Groups and Global R&D in his capacity as Chief Commercial Officer at PepsiCo.

Prior to that, he headed the beverage maker’s Latin America, Europe and Sub-Saharan Africa operations, managing annual sales of 14.5 billion pounds ($18.5 billion) – more than the total annual sales of Reckitt Benckiser. At one time he was also chief financial officer of the group’s Americas Foods business.

Narasimhan studied mechanical engineering in India before moving to the United States for an MBA degree. Before joining PepsiCo, he worked at consultants McKinsey for two decades, where he advised on large consumer and healthcare deals.

Reuters