PAUL WALSH is to step down as chief executive of Diageo after almost 13 years in which he transformed the business from a sprawling consumer goods group into the world’s largest drinks company.
Walsh will hand over the reins in July to Ivan Menezes, who has been widely viewed as the heir apparent to succeed Walsh after being promoted to the role of chief operating officer last year.
Diageo’s value has tripled under Walsh’s leadership from 577p in September 2000 to 1,977p last night making it the FTSE 100’s eighth largest firm with a market capitalisation of £49bn.
The company grew by around 30 per cent over the last year alone after stepping up its exposure to emerging markets and making acquisitions in countries such as Brazil, India and Turkey.
Franz B Humer, chairman of Diageo, said: “Paul is an outstanding chief executive. He has served our business, its shareholders, employees and partners with enormous imagination and dedication over the past 13 years. I know he is justly proud of Diageo and its people and he leaves a great legacy for his successor.”
Walsh will retire as chief executive on 30 June and step down from the board in September, but he will stay on as an adviser to the company until June 2014, to ensure a smooth transition to Menezes.
The 52-year-old ran Diageo North America for eight years before being made chief operating officer last year. He joined Guinness in 1997 in the same year it merged with Grand Metropolitan to form Diageo.
PROFILE: PAUL WALSH’S TRIUMPHANT REIGN
ONE of the FTSE 100’s longest standing chief executives, Paul Walsh’s career at the firm stretches back to 1982 when he joined its precursor Grand Metropolitan as an account manager for its brewing division. Walsh – who had dreams of being a fighter pilot growing up – rose through the ranks, becoming finance chief of Intercontinental Hotels in 1987, where he helped to orchestrate its sale for $2.3bn the following year.
In 1992, he became chief executive of the food group Pillsbury, which Grand Met had recently acquired, helping to grow Haagen-Dazs into a well-known brand outside of the US and tripling the food group’s size by 2000. In 1997, Grand Met merged with Guinness and the new company was named Diageo. Walsh was promoted to chief operating officer of Diageo in January 2000, and chief executive in September 2000 – a career path repeated by his successor Menezes, who was made chief operating officer last year. Walsh made the drinks sector the main focus of the consumer group, selling off Pillsbury to General Mills in 2001 and Burger King to the private equity firm Texas Pacific Group in 2002. One of his most notable deals, which gained him acclaim for turning around the group, was the acquisition of the Seagram drinks business from Vivendi Universal together with Pernod Ricard for $8.2bn in 2001. Walsh’s successes include refocusing the group’s attention on emerging markets and making a string of acquisitions, including its recent move to increase its stake in India’s United Spirits.