Activist investor, Nelson Peltz, has renewed his campaign to
) to separate its underperforming beverage business from the
snacks business which is going strong. As per media
reports, Peltz has warned that he will take the case directly to
As per media sources, Peltz in a 37-page letter to Pepsi's
board, has urged that the two businesses be separated to enable
the company to concentrate on snacks, thereby accelerating its
sales and profits. He has argued that a split would "create two
leaner and more entrepreneurial companies." The letter was made
public on Thursday after which shares of Pepsi gained around
Peltz's investment company, Trian Fund Management, holds major
stake in Pepsi. Shifting consumer preferences toward health and
wellness and "good-for-you" products is lowering the demand for
high-calorie soft drinks, especially in North America. Thus,
beverage giants like Pepsi and
The Coca-Cola Company
) are witnessing declining sales of carbonated beverages,
especially the colas. Peltz feels Pepsi's underperforming
beverage business is overshadowing its fast growing snack
However, last week, Pepsi chief, Indra Nooyi announced thatthe
company intends to retain the American beverage business as it
was in the best interests of the company. As per media sources,
Peltz was highly disappointed with the decision.
Peltz had earlier pushed Pepsi to buy global snacks company,
Mondelez International, Inc.
). However, he put off this agenda after joining the former's
board in January this year. Trian Fund Management also holds
major stake in Mondelez.
Previously known as Kraft Foods, Inc., Mondelez changed the
name following the spin-off of its North American grocery
business into a separate independent company,
Kraft Foods Group, Inc.
) in Oct 2012.
Pepsi carries a Zacks Rank #3 (Hold).
COCA COLA CO (KO): Free Stock Analysis Report
KRAFT FOODS GRP (KRFT): Free Stock Analysis
MONDELEZ INTL (MDLZ): Free Stock Analysis
PEPSICO INC (PEP): Free Stock Analysis Report
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