Shares droop in shake-up at Coke

Daft to form 4 units

stock falls $2.35 as Stahl departs


Shares of Coca-Cola Co. fell yesterday after the giant soft-drink maker announced sweeping management changes in its effort to revive its beverage business.

Under the direction of Douglas N. Daft, who took over as chairman and chief executive about a year ago, Coke will be divided into four business units. Jack L. Stahl, who had worked at Coke for two decades, has resigned as president and chief operating officer.

The decision, announced Sunday, appeared to have been made suddenly. Recently, Stahl was among the executives who discussed Coke's plans with investors and analysts, and the company's proxy statement, which was issued Friday, made no mention of his resignation. A company spokesman said Stahl decided Friday that he would leave.

Coke's shares fell $2.35, to $50.20 yesterday. UBS Paine Webber cut its price target for the shares to $52 from $61 and reduced its earnings estimates, saying the management shake-up "could further delay a significant turnaround in profitable volume growth."

Stahl's departure did not take investors completely by surprise. Daft and Stahl were said to have had some differences of opinion.

Andrew Conway, an analyst at Morgan Stanley, said, "There were rumblings for many months as to how Mr. Daft and Mr. Stahl would work together in developing a cohesive long-term strategy."

Under the new structure, the company will be divided into three geographic units, for the Americas, Asia and Europe-Africa, and one dedicated to new business ventures. In keeping with Daft's emphasis on shifting decisions to the local level, the executives of those units will report to him rather than to a chief operating officer.

"These units will work together," Daft said in a statement, "as a nimble and entrepreneurial network well equipped to seize promising market opportunities and capture value."

Daft said Stahl had "concluded that, having helped the Coca-Cola Co. reset its agenda and priorities, he wanted to seek new leadership challenges elsewhere."

Neither Stahl nor Daft was available for further comment, the company spokesman said.

While the change put Daft even more firmly in charge of the company's future direction, analysts were divided about whether the restructuring would help him accomplish his goal of reviving Coke's fortunes. The company's soda sales have been lackluster, and investors have grown frustrated.

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