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Reckitt Benckiser boss to step down at the end of 2019 after 8 years in the top job

The maker of Durex condoms and Harpic cleaner said it has started the search for a new chief executive
Kapoor spent 32 years at Reckitt and was appointed chief executive in September 2011

Reckitt Benckiser Group PLC (LON:RB.) saw its shares retreat on Wednesday following news its chief executive Rakesh Kapoor plans to retire at the end of the year after more than eight years in charge of the consumer goods group.

The company, which owns the Durex condoms, Vanish stain remover, Harpic cleaner and Scholl footcare brands, said it has started a search for Kapoor’s replacement and will consider both internal and external candidates.

READ: Reckitt Benckiser third quarter sales hit by manufacturing disruption in Europe

Kapoor has spent 32 years at Reckitt and was appointed chief executive in September 2011. As boss, he helped the company grow from a household cleaning business to a consumer goods giant.

Kapoor said the last two years have been particularly “transformational” with the 2017 acquisition of US baby formula business Mead Johnson, which was the catalyst for the creation of two business units – health and hygiene, and home.

“2020 will herald a new decade and I believe now is a good time for new leadership to take this great company through the next phase of outperformance,” he said. “I will remain fully focussed on driving the business until a successor is in place."

Business split nearer?

In a note to clients, analysts at Liberum Capital pointed out that “Kapoor was the key driver behind the group's strategic push to become a world leader in consumer health products and is the architect behind the group's RB 2.0 program which is ultimately designed to split the business into two fully separate, stand-alone businesses - Health and Hygiene Home.”

They added: “In light of today's announcement and the material progress on RB 2.0 to date, we expect Mr Kapoor's departure could signal the start of plans to formally split the businesses into two separate entities.

“This could make either or both of the two businesses more attractive to prospective third parties. We expect today's announcement will bring new interest to Reckitt shares in 2019.”

Liberum maintained a ‘buy’ rating and 7,300p target price on Reckitt shares. In late morning trading, the stock was down 2.6% at 6,088p.

 -- Adds share price, analyst comment --

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