US: PepsiCo sees "no need" for major M&A

By Dean Best | 25 March 2013

PepsiCo and Mondelez insisted focus was on existing businesses

PepsiCo and Mondelez insisted focus was on existing businesses

PepsiCo has insisted it sees "no need" for major deals after speculation activist investor Nelson Peltz had snapped up shares in the company - and in snacks group Mondelez International.

The Daily Telegraph reported on Friday (22 March) that US billionaire Peltz had acquired stakes in the two businesses. The newspaper claimed Peltz had spent at least US$2bn amassing shares in the companies and said he could look to push for a merger of the food giants.

Speaking to just-food on Friday evening, a PepsiCo spokesperson said the company did not comment on "rumours or speculation" but added: "As we've said before, we are making strong progress in our strategy to deliver long-term growth and create shareholder value, and we do not see the need for any large scale M&A." The spokesperson declined to comment on whether Peltz had purchased shares in PepsiCo.

Peltz was reported to have snapped up the stakes via his Trian Fund Management investment vehicle. A spokesperson for the fund said it too had "no comment" to make on the story.

Over at Mondelez International, the owner of brands including Cadbury and Oreo, the company, like PepsiCo, said it was focused on its own business.

"As a matter of practice, we don't comment on market rumours or speculation," a spokesperson told just-food. "But here's what I can say: We're focused on running our terrific company. With our advantaged mix of categories, a geographic footprint with strong exposure to fast-growing developing markets and leading market positions around the world, we have a bright future with a long runway of growth opportunities ahead of us."

In the past, Peltz often invested in FMCG companies he feels are under-valued or can improve their performance.

In the last six years, he has bought shares in the likes of Heinz, Kraft Foods and the then Cadbury Schweppes, companies he believed needed to change strategy. Peltz is often credited as the catalyst for the split of Cadbury Schweppes, which led to the creation of stand-alone confectionery firm Cadbury.

His most recent high-profile investment was in Danone. Peltz snapped up shares in the French company last year. Since then, Danone has announced plans to shake up its business in Europe, where its sales and margins fell in 2012. Danone, however, has insisted there is no link between the Peltz investment and the changes at the company.

Sectors: Cereal, Confectionery, Dairy, Mergers & acquisitions, Snacks

Companies: PepsiCo, Mondelez International, Cadbury, Danone, Heinz

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