By Brenna Hughes Neghaiwi
ZURICH (Reuters) - Nestle SA <NESN.S> named Ulf Mark Schneider as its next chief executive in a surprise choice on Monday, as the Swiss food giant underlined a shift towards health and wellness by poaching the boss of German healthcare group Fresenius <FREG.DE>.
Schneider will replace Nestle's long-standing CEO Paul Bulcke, whom the board has proposed as chairman when 71-year-old Peter Brabeck-Letmathe hits mandatory retirement age next year.
Nestle's appointment of Schneider, a U.S.-German dual citizen, marks the company's first external hire for the CEO job in nearly a century.
"This is a truly iconic global company with a proud heritage and tremendous future prospects," Schneider, 50, said in a statement released after the market close.
Earlier in June, Brabeck hinted the company could be eyeing external candidates for the CEO role, although many analysts and shareholders still expected it to continue its tradition of promoting internally.
Nestle's best-known goods range from baby food to coffee and chocolate, but it has been investing more recently in higher-margin, higher-growth healthcare products as it tries to fend off criticism that its scale stifles agility.
It has signed a series of deals with small companies in its bid to create a new kind of business that is midway between food and pharmaceuticals. The goal is to find new ways to treat, diagnose and prevent a range of diseases, from gastrointestinal problems to Alzheimer's.
Nestle said the board had appointed Schneider with the long-term orientation of the company in nutrition, health and wellness and full the integration of its health science and skin health divisions in mind.
Both divisions will report directly to the CEO from Jan. 1.
Known as a hard worker who enjoys great respect within the industry, Schneider grew Fresenius through a series of deals, increasing sales fourfold and net income twelvefold during his 13 years at its helm.
"He has led Fresenius through a period of exciting and sustainable growth and has truly transformed the company," Fresenius Chairman Gerd Krick said in a statement announcing Schneider's resignation on Sunday. "While we regret his departure we wish him the very best for his future endeavors."
When burning the midnight oil, Schneider has been known to consume nutritional drinks made by Fresenius's hospital nutrition unit Kabi to get himself going again.
He will assume the role of chief executive at Nestle at the start of 2017 after an introductory period with the company beginning in September.
Bulcke, who has led the company since 2008, will resign at the end of 2016 to respect a mandatory cooling-off period before standing for election as chairman at Nestle's annual general meeting on April 6, 2017.
While the CEO runs the company, the chairman provides strategic guidance. Nestle's last four chiefs, whose collective CEO tenure lasted 40 years, all became chairmen.
(Additional reporting by Ludwig Burger; Editing by Joshua Franklin and Alexander Smith)