Procter and Gamble is replacing chief executive Bob McDonald with his predecessor, A.G. Lafley, as the world's largest consumer products maker struggles to rekindle growth at home and abroad.

Mr McDonald embarked on a turnaround plan last year to cut $10 billion in costs through 2016 and renew focus on the company's leading businesses after losing market share to such rivals as Unilever.

Activist investor Bill Ackman bought a stake valued at $1.8 billion last year and pushed to replace Mr McDonald.

Mr Lafley (65), who started working at the Cincinnati-based company in 1977 and served as president and chief executive from 2000 to 2009, will succeed Mr McDonald immediately, the company said.

Mr McDonald (59) will retire on June 30th after 33 years of service and will not receive any severance payments, the company said.

“The board called me and asked me if I would come back, and frankly, duty called,” Mr Lafley said in a telephone interview .

“I’m back. I’m full on, I’m engaged, and I’m ready to get into the business.”

Mr Lafley, who will earn a base salary of $2 million a year, said he plans to continue Mr McDonald’s turnaround plan.

P&G's board discussed the prospect of replacing Mr McDonald as far back as last July, people familiar with the matter told Bloomberg at the time.

Mr Lafley gained a reputation for pushing innovation at P&G, telling employees to get their ideas directly from consumers by observing them in their homes as they did household tasks.

He pushed into emerging markets in Asia and Latin America and expanded P&G's global reach with the $57 billion acquisition of Gillette in 2005.

He also pushed premium-priced products such as high-end versions of Tide and Bounty. When he stepped down and handed the reins to Mr McDonald, it was to an executive who’d been his right-hand man as chief operating officer and longtime confidante.

While Mr Lafley groomed Mr McDonald for the top job for several years, Mr McDonald’s main experience was overseeing operations rather than setting strategy and motivating change in the ranks.

Mr Lafley's return echoes one at J.C. Penney, where chief executive Ron Johnson was replaced by predecessor, Myron Ullman, after an ambitious strategy alienated shoppers and tanked sales.

Bloomberg