Nestle SA  (IW 1000/30) announced a 20 billion-franc (US$21 billion) share buyback program, in its first strategic move after Dan Loeb’s hedge fund Third Point bought a stake and urged the Swiss food company to shake up its “staid culture.”

Nestle will start repurchasing shares July 4 and the program will run through 2020, the Vevey, Switzerland-based maker of Gerber baby food and DiGiorno pizza said on June 27.  The company said it expects a net debt to EBITA ratio of about 1.5 in 2020.

CEO Officer Mark Schneider is reversing Nestle’s policy on buybacks just days after being urged to do so by Third Point. The food maker hasn’t had a repurchase program since 2014, and Schneider said in February in his first public appearance as CEO that buying back stock is a lower priority than reinvesting in Nestle’s business and paying dividends.

The Swiss company’s reaction echoes the strategy shift Unilever announced in April after Kraft Heinz Co.’s failed takeover bid. The Anglo-Dutch company said it would buy back 5 billion euros (US$5.7 billion) of stock and divest its spreads business as the unsolicited $143 billion offer led CEO Paul Polman to pledge better shareholder returns.

In addition to recommending a buyback, Loeb urged Nestle to sell its 23% stake in cosmetics maker L’Oreal SA, eject underperforming brands and take on more debt.

Nestle was the weakest performer among six of Europe’s biggest consumer-goods stocks including Unilever and Anheuser-Busch InBev NV in the previous three years.Third Point said when announcing the purchase.

The company’s 2016 sales growth fell to the slowest pace in at least a decade amid sluggish demand and Schneider abandoned Nestle’s long-standing revenue target two months after becoming CEO.

By Corinne Gretler