CINCINNATI (AP) -- Procter & Gamble Co. said Wednesday it chose 29-year company veteran Bob McDonald, citing his broad global experience, to lead the world's largest consumer-products company.
McDonald, who will take over July 1 as CEO, has helped build P&G's developing markets business and restructure company operations. P&G made the announcement on the long-expected succession a day after its board met in Cincinnati.
A.G. Lafley, who became chief executive nine years ago this week, will remain as chairman. He will be 62 Saturday.
McDonald will turn 56 later this month, before he moves up from chief operating officer to become company president and the 12th CEO in P&G's 172-year history.
The Gary, Ind., native and West Point graduate has deep experience in the Asian region where he sees strong growth opportunities for P&G, whose household brands include Tide detergent, Gillette shavers and Pampers diapers. He thinks P&G, whose sales and earnings growth have fallen during the recession, can more than double its annual sales, to $175 billion a year, over the next 15 years by increasing its reach into countries such as India, China and Brazil.
Jim McNerney, the Boeing Co. chief executive and presiding director of P&G's board, praised Lafley for making the company more consumer-driven and innovative, and said McDonald is well-suited to take over now.
"Bob McDonald is the most broadly and globally experienced CEO in P&G history," McNerney said in a statement. "He has nearly 30 years of brand-building, market development, global business unit and global operations leadership experience across the company and throughout the world."
P&G shares rose 13 cents to $52.54 in morning trading. The stock has traded as high as $73.57 as recently as last September before falling as low as $43.93 earlier this year.
Analysts had been expecting McDonald to get the nod to succeed Lafley. The change "would end the uncertainty around this decision and provide known leadership as P&G navigates the worldwide recession," BMO Capital Markets analyst Connie Maneaty said in a client note Tuesday.
McDonald has said that P&G's fastest growth is coming from emerging markets, and that P&G will aggressively step up its presence in the developing world, building new plants in countries as far-flung as Pakistan and Nigeria.
"There's no question that the basic demographics are going to take the center of gravity of our business to Asia, to Africa -- where the people are, where the babies are being born," McDonald said in an interview last year.
Lafley told analysts in May that the company is increasing business-building efforts in emerging markets, investing in marketing and developing new products for its major brands, and will add to both its lower-priced product line during a time of household belt-tightening and to its better-margin premium products such as Tide Total Care and Olay Pro X skin cream.
McDonald served as a U.S. Army captain before joining P&G in 1980. Early in his career, he worked with dishwashing and laundry products before heading to the Philippines in 1991, then Japan, and rose within a decade in Asia to become president for Northeast Asia in 1999. He became vice chairman for global operations in 2004.
He told The Associated Press last year that P&G's future is tied to its global reach and that as a leader, he has to be a student of other cultures.
"My job at P&G is to be a globally effective leader, not just be an effective leader in my own country, in my own culture," he said.
McDonald became chief operating officer in 2007 during a reorganization in which Susan E. Arnold was named president for global business units. Analysts saw the reorganization as signaling they were the top two candidates to succeed Lafley, and McDonald became the clear front-runner after Arnold stepped down as president last March.
Arnold, 55, started with P&G in 1980, as McDonald did.
The company also has made other leadership changes in recent months, including Jon Moeller succeeding Clayton Daley Jr. as chief financial officer and Marc Pritchard taking over as global marketing officer for Jim Stengel.
Profit for P&G's fiscal year that ended June 30, 2008, rose 17 percent to $12.1 billion. Sales grew 9 percent to $83.5 billion, more than double the annual sales when Lafley took over.
The orderly transition plan contrasts with Lafley's promotion to CEO on June 8, 2000, as the company's stock was in a free fall, tumbling 50 percent in six months amid earnings misses and warnings that upset investors used to steady results. Lafley, then the head of P&G's global beauty and North America businesses, was summoned by telephone by P&G's board to leave a California meeting and fly back immediately to Cincinnati to replace Durk Jager.
Lafley helped the company right itself and go on a run of profit and sales growth by emphasizing innovation and a "consumer is boss" focus, which meant more time spent in personal observation and interviews with consumers. Lafley himself often visited homes to watch how people did household chores and used P&G products. Lafley also opened up product development with a "connect-and-develop" push that welcomed outsiders' ideas and products that P&G could build up with its size and know-how.
P&G focused on key brands -- it now has 23 with at least $1 billion each in annual sales compared to 10 in 2000 -- and sold off slower-growth brands such as Comet cleanser, Sure deodorant and Folgers coffee under Lafley. Just last week, P&G said it would phase out U.S. sales of Max Factor cosmetics, where they have been small compared to overseas markets.