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Sanofi board votes out CEO Viehbacher

Unanimous decision ends weeks of speculation

Sanofi Chris Viehbacher

Chris Viehbacher was ousted as chief executive of Sanofi this morning after a vote by the company's board of directors, ending weeks of speculation about his position.

The decision to remove Viehbacher after six years at the helm was unanimous, according to Sanofi, and comes in the wake of growing tensions between the CEO and the remainder of the French company's board, particularly chairman Serge Weinberg.

Weinberg - who will now take over the CEO role on a temporary basis - has reportedly clashed with Viehbacher over the management of Sanofi in recent months, while relations between Viehbacher and the rest of the board have also grown increasingly strained.

One factor attributed to the breakdown in relations is Viehbacher's decision to relocate from France to the US in June, although there have been persistent reports of culture clashes as his Anglo-Saxon management style clashed with Gallic sensibilities.

In 2012, the CEO was forced to scale down plans to make sweeping job cuts and relocations among R&D staff in France after resistance from trade unions, with suggestions that the board was unhappy about the handling of the politically sensitive issue.

There have also been rumours that Viehbacher was continuing to press ahead with plans to break up parts of the group - including an attempt to sell off a portfolio of mature products for $7bn - despite opposition from other board members.  Weinberg told Bloomberg that initial plans for the sale were made without consulting the board.

Last month, Viehbacher wrote a letter to the board claiming that Weinberg was "actively seeking a successor to me as CEO." The letter provided a treatise on his performance as a CEO since joining the firm in 2008 and said that "changing the CEO would be against a backdrop of a company and a leader perceived to be succeeding strongly."

Tellingly, he was unable to confirm the support of the board yesterday whilst discussing Sanofi's third-quarter results on a conference call with analysts, at which the company reported sales being up 5% to €8.78bn, but warned of growing price competition to its important diabetes franchise in the US.

A statement issued by Sanofi's board this morning thanks Viehbacher "for all the work done during the last six years, which has enabled the group to move through a sensitive and important transition phase."

In a nod to the apparent breakdown in communication, it adds however that the company needs a management "aligning the teams, harnessing talents and focusing on execution with a close and confident cooperation with the board."

Sanofi's share price has already been under considerable pressure in the last few days - falling 11% yesterday in the wake of the results meeting - and had dropped 3.60% this morning to €71.85 as this article went to press.

Article by
Phil Taylor

29th October 2014

From: Research, Sales



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