Commentary

Bart Becht, Chairman Of Acquisitions-Happy JAB, Retires To 'Refocus'

Bart Becht, who of late has been leading JAB Holding Co.’s offensive in the global coffee wars, unexpectedly resigned as its chairman yesterday a couple of months after he vacated the same post at Coty, the cosmetics business also owned by JAB.

“After almost 40 years in the branded consumer business, I have decided it is time to refocus my activities and retire,” says the 62-year-old Becht in an understated news release that announces his departure along with the addition of three senior executives to the JAB team.

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There’s apparently more to the story. The release also states that Becht’s two partners, Peter Harf and Olivier Goudet, “will continue to lead JAB and oversee its investment strategy.” Harf will be chairman.

Becht, who is “renowned both as a prolific dealmaker and as formerly Britain’s best-paid boss, was said to have clashed with his two partners over the scale of the group’s dealmaking after a five-year $50 billion takeover spree. According to the Financial Times, the Dutchman had failed to convince JAB, an investor backed by the Reimann family of Germany, to cut back on its ambitions to concentrate on improving operations at its companies,” Louisa Clarence-Smith writes for The Times.

JAB senior partner Harf is “the trusted confidante of the Reimanns” and partner and CEO Goudet is “the former chief executive of Mars who is also the chairman of AB InBev,” according to the Financial Times’ Leila Abboud and Arash Massoudi.  “According to the people briefed on the falling out, Mr. Goudet was pushing for doing more deals and growing assets under management,” they write.

“The working relationship among the three men had deteriorated lately, according to two people close to them, as the strains of JAB’s rapid expansion began to weigh. The workaholic Mr. Becht also felt a desire to step back from intense day-to-day operations, according to one of the people. Once he expressed a desire to leave, the three agreed a departure was the best move,” Abboud and Massoudi add.

JAB Holding Company and JAB Consumer Fund have controlling stakes in Keurig Dr Pepper, Jacobs Douwe Egberts, Panera Bread, Pret A Manger, Peet's Coffee & Tea, Caribou Coffee Company, Einstein Noah Restaurant Group, Krispy Kreme Doughnuts, and Espresso House, the largest branded coffee shop chain in Scandinavia. JAB is also the largest shareholder in Coty and owns a controlling stake in luxury goods company Bally as well as a minority stake in Reckitt Benckiser.

The three executives who are joining JAB are Fabien Simon, Ricard Rittes and Jacek Szarzynski. All have a background at consumer products companies, CNBC’s Amelia Lucas reports. 

“Simon, who previously worked at JAB's Jacobs Douwe Egberts, will become the group's chief financial officer. Rittes, who worked at Anheuser Busch Inbev, will open a new office in Brazil to head up expansion in emerging markets, while Szarzynski will come from privately held Mars to lead a newly formed division called Pret Panera Holding Co.,” Lucas writes.

“In an email, Mr. Becht said he was ‘ready to slow down the pace and take an extended break,’” Saabira Chaudhuri writes for the Wall Street Journal. “London-based Mr. Becht, who had worked at JAB since 2011, has been a key figure in the company’s aggressive acquisition spree in recent years. JAB has splashed out on several high-profile acquisitions, including deals to buy British sandwich chain Pret A Manger Ltd. and Dr Pepper Snapple Group Inc., the No. 3 soft-drink company in the U.S.

“In a 2012 interview with the Wall Street Journal, Mr. Becht lauded JAB’s flexibility, saying working at the company wasn’t ‘necessarily always a full-time job.’ However, more recently he has taken the view that JAB’s ‘steadily increasing workload’ requires too much of his time,” Chaudhuri continues.

“Of course, it’s not unheard of for sixty-something chief executives with storied careers to retire to spend more time on the beach, but the headlong nature of JAB’s expansion makes it worth a closer look,” observes David Fickling for Bloomberg Opinion.

A seasoned dealmaker, Becht was the CEO of Benckiser NV in the 1990s who presided over its merger with struggling British consumer goods company Reckitt & Colman to produce Reckitt Benckiser Group Plc, maker of Strepsils, Clearasil and Veet, Fickling points out.

“Becht’s departure should be a moment to step back and consider. JAB has cut a swath through the global consumer industry, but right now its long-term investors would do well to keep the focus on getting its existing assets to throw off cash, so that the next leg of acquisitions can be funded internally,” Fickling observes. “Debt, like donuts, can look tempting when it’s presented to you on a plate. Circumspect managers know they need to have a little fiber too if they’re to avoid indigestion.”

And kale. Don’t neglect the kale.

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