Peltz to join Mondelez board, ends push for PepsiCo deal

Tue Jan 21, 2014 4:14pm EST
 
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By Aditi Shrivastava and Lisa Baertlein

(Reuters) - Mondelez International Inc (MDLZ.O: Quote), maker of Cadbury chocolate and Oreo cookies, on Tuesday added activist investor Nelson Peltz to its board in a compromise agreement that ends his campaign to have PepsiCo Inc (PEP.N: Quote) take over the company.

Analysts now expect the influential investor to separately lobby each company to improve their results.

Last year, Peltz urged Mondelez to sell itself to the beverage and snacks giant, but PepsiCo balked at such a deal.

Trian is Mondelez's fourth-largest shareholder, with a 2.3 percent stake, according to Thomson Reuters data. Trian also owns 0.8 percent of PepsiCo.

Peltz last summer said PepsiCo was at a "strategic crossroads" due to changing consumer tastes and the rising importance of emerging markets, and outlined two scenarios for improving results.

Plan A was to merge PepsiCo with Mondelez to create a larger company with one of the most valuable brand portfolios in the world. Plan B called for Pepsi to split its snacks and beverages businesses - which would allow each to focus on operational improvements.

"Given that Pepsi's not interested in Plan A, we are encouraging them to pursue Plan B," Anne Tarbell, a spokeswoman for Peltz's Trian Fund Management, told Reuters.

Peltz, 71, also has pushed Mondelez - whose performance has fallen short of investor expectations since it was split from Kraft in October 2012 - to manage its costs better, saying it could double earnings per share by doing so.   Continued...

 
The logo of Mondelez International is pictured at the company's building in Zurich November 14, 2012. REUTERS/Michael Buholzer