Philips Shares Rise After Departure of CEO Announced

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Philips Shares Rise After Departure of CEO Announced
Credit: © Reuters.

By Scott Kanowsky -- Shares in Koninklijke Philips NV (AS: PHG ) jumped by more than 3% on Tuesday after the Dutch health technology firm announced the departure of chief executive Frans van Houten.

Van Houten is set to step down on October 15, with Roy Jakobs, head of the business' Connected Care division, tapped as his replacement.

"The Supervisory Board and [...] van Houten have agreed that with the end of his third term in sight, the time is right for the change in leadership," Philips said in a statement.

Jakobs will take the helm of a company reeling from the recall of millions of faulty medical devices used to assist patients suffering from breathing issues whilst sleeping. This year, Philips has warned of lower profits and slashed its annual guidance.

The group has seen its share price nearly halve over the past one-year period.

Philips credited Jakobs with "turning around businesses in customer-focused growth organizations," as well as making "substantial progress" in delivering solutions to patients impacted by the recall.

An extraordinary general shareholder meeting will be held on September 30 to appoint Jakobs as president and chief executive officer, Philips said. Van Houten will remain with the company in an advisory role supporting the transition until April 30.

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