Indra Nooyi is to become the first Indian woman to run a major American corporation after PepsiCo announced that its president and chief financial officer will take over as chief executive on October 1.

Ms Nooyi, 50, who has climbed the Pepsi corporate ladder for 12 years, joins an elite group of about a dozen women who head the 500 biggest US corporations. The new Pepsi chief will become one of the most powerful woman in American business.

The largest US company in terms of revenue run by a woman is Archer Daniels Midland, which named Patricia Woertz as chief executive in April. Kraft Foods, whose chief executive is Irene Rosenfeld, is No 2. With Ms Nooyi’s appointment, PepsiCo would become No 3.

Steve Reinemund, 58, the outgoing Pepsi chief executive and chairman, said yesterday that he would retire next May in order to spend more time with his wife and children.

Ms Nooyi was raised in a middle-class family in India and studied at the India Institute of Management in Calcutta. She joined Pepsi in 1994 after working for Motorola as a corporate strategist.

Colleagues describe her as a tough boss who speaks plainly and does not tolerate anything but the highest performance. She is said to have a lighter side, with a good sense of humour, and has been known to sing quite audibly while working in her office.

After securing the multibillion-dollar acquisitions of Tropicana in 1998 and Quaker in 2001, Ms Nooyi was granted a seat on the Pepsi board and has since then been viewed by insiders as an obvious choice to replace Mr Reinemund. “Indra’s record of transforming PepsiCo speaks for itself, and she has been an invaluable partner and ally throughout my time as CEO,” Mr Reinemund said.

Wall Street was surprised by the announcement but pleased with the prospect of a smooth transition. The company shares barely moved yesterday and were up a little at $63.95 at the close on Wall Street.

“Given Indra’s involvement in the company’s strategy, vision and her current role as president and chief financial officer, we would expect a seamless transition,” William Pecoriello, an analyst at Morgan Stanley, said.

Ms Nooyi has been a key figure behind Pepsi’s expansion into non-carbonated drinks and healthier snacks — a big shift from its core cola and crisps products. Because of this shift, the company has enjoyed increased sales in the past year and an improved share price.

PepsiCo shares are up about 44 per cent since April 2001, compared with a 5 per cent decline in Coca-Cola shares over the same period. PepsiCo stock is up nearly 80 per cent from a low under of $35.60 recorded in September 2002 under Mr Reinemund’s stewardship.

Once Ms Nooyi’s promotion takes effect, Richard Goodman, 57, head of finance at Pepsi’s international division, will become chief financial officer of the corporation.

In a conference call with analysts and investors Ms Noori said that she was keen to meet shareholders as soon as possible.

At the top

America’s leading women chief executives:

• Indra Nooyi
  PepsiCo
  Market cap $104.41 billion
  
• Irene B. Rosenfeld
  Kraft Foods
  $55.73 billion
  
• Meg Whitman
  eBay
  $34.25 billion
  
• Patricia Woertz
  Archer Daniels Midland
  $26.72 billion
  
• Anne Mulcahy
  Xerox
  $13.03 billion
  
• Brenda Barnes
  Sara Lee
  $12.76 billion
  
• Andrea Jung
  Avon Products
  $12.38 billion

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