Coca-Cola named Muhtar Kent its chief operating officer, making him the frontrunner to succeed Chief Executive Neville Isdell.
Kent, who first joined Coke in Atlanta in 1978, most recently headed up the international operations of the Atlanta beverage giant.
The appointment fills a position that has been vacant for more than two years. Coke left the position vacant after the departure of Steve Heyer, who left the company after being passed over for the CEO post.
"We consider Mr. Kent a logical choice given his current role and Coke system experience," said Mark Swartzberg, an analyst at Stifel Nicolaus. "We are less clear he is a good choice given his relatively short tenure as head of international. As a result, we look at the move positively, but unenthusiastically."
The 54-year-old Turkish native has been in charge of Coke's international operations since the beginning of this year. In the past, he has been credited with opening up Eastern Europe, Russia, and other emerging markets.
Kent is a longtime protege of Isdell, who was brought out of retirement to lead the company in 2004 after the unexpected departure of Douglas Daft, who replaced Douglas Ivester in 2000. Ivester became chief executive after the death of Coke's longtime leader Roberto Goizueta.
The selection of Kent as heir apparent raises questions about whether Mary Minnick, head of marketing, innovation and strategy, will remain with Coca-Cola now that she appears to have been passed over for the top post.
According to Swartzberg, this is a "relatively low and manageable risk."
Minnick, who formerly headed Coke's highly profitable Japanese business, was at one time seen as the leading candidate for the top spot.
Minnick and Chief Financial Officer Gary Fayard will continue to report to Isdell. However, Coke's regional heads and Irial Finan, head of bottling investments, will report to Kent.
The appearance of succession planning at Coke was viewed favorably by investors, as it will lay the ground for an orderly transition.
"It paves the way for a transition down the road," said Walter Todd, a portfolio manager at Greenwood Capital. Todd doesn't own shares of Coke. "It is good to see them establishing some continuity, which is something that they lacked in the past.
Kent's promotion comes despite his involvement in a insider trading scandal 10 years ago that cost him his job as managing director of Coca-Cola Amatil-Europe, part of a regional bottler based in Sydney, Australia. Kent's financial adviser had sold short 100,000 shares of Amatil on Kent's behalf just hours before the company issued a profit warning in November 1996. Short-sellers typically borrow shares and sell them, betting the price will fall, so that they will be able to buy back the shares to repay the lender at a lower price.
Kent made A$324,000 on the transaction and was pressured to resign amid an investigation by Australian securities regulators.
"Without doubt, Muhtar is a man of the highest integrity and deepest skills," Isdell said in a statement.