E-Malt.com News article: World: Diageo to toast soon the retirement of CEO Paul Walsh

Diageo, the British company behind spirits like Guinness, Johnnie Walker Scotch and Smirnoff vodka, will soon toast the retirement of its long time chief, Paul S. Walsh. The veteran executive plans to pass the top job to COO Ivan M. Menezes at the beginning of July, the company announced earlier this month.

Walsh, who managed an impressive expansion of Diageo’s business, will remain for a year to ease the transition. He plans to retire in June 2014. Under Walsh, Diageo’s stock rose more than 250%, as he maneuvered the company into faster-growing emerging markets.

“The handover is being made at a time when the business is strong and Ivan takes on the role of chief executive officer at an exciting stage of the company’s global development,” says Diageo Chairman Franz B. Humer.

Walsh made no secret of this succession planning, telling The Wall Street Journal last year, “I think every CEO should take the issue of succession planning very, very seriously. My job is to give the board options. It’s pretty clear…that Ivan is the lead internal candidate. There are many other talented players in this business as well, but Ivan is the lead player.”

Menezes played a role in Walsh’s growth plans, which helped take the sting from a sales slump in Europe in the recession. After running the North American business for eight years, he became COO last March and helped orchestrate Diageo’s purchase of Brazilian cachaca brand Ypioca and Chinese white-spirits-maker. He also aided Walsh’s bid to buy a $2 billion (53.4%) stake in United Spirits, moving Diageo into selling whiskey in India, and announced the $1.5 billion investment that Diageo plans to put in its Scotch production over the next five years to meet emerging market demand. Diageo also tried–and failed–to wrest Jose Cuervo, the world’s best-selling tequila, from its Mexican owners.

Diageo, with a $76.9 billion market capitalization, competes with businesses like Anheuser-Busch InBev and Heineken, as well as U.S. liquor-makers like Brown-Forman and Beam Inc.

Walsh tossed stakes in Burger King and Pillsbury–the corporation he started in prior to the 1997 merger between beermaker Guiness and Pillsbury’s parent company that created Diageo–to concentrate on liquor. After that, he undertook an acquisition binge that included buying a portion of Seagram’s liquor business in 2001 for $5 billion, in which Diageo received Crown Royal, then the second-highest-volume premium whiskey in the U.S.

17 May, 2013