Nelson Peltz, one of America’s most popular corporate raiders could lead a $170 billion (£112 billion) merger between PepsiCo, Inc. (NYSE:PEP) and Cadbury-owner Mondelez International Inc (NASDAQ:MDLZ) after passively buying major stakes in the two consumer giants.
Nelson Peltz has been buying shares of both PepsiCo, Inc. (NYSE:PEP) and Mondelez International Inc (NASDAQ:MDLZ), previously known as Kraft Foods Group Inc (NASDAQ:KRFT), through his hedge fund, Trian Fund Management, according to the sources. There is no confirmation over the exact size of the stakes in both the U.S.-listed companies; however, according to an article in the Telegraph so far Peltz has paid $2 billion for the stakes.
Peltz is a famous figure from Brooklyn who has an estimated worth of $1.1 billion, according to Forbes. He is well known in the investment community as a daring and risk-taking investor who likes strategic change and take on company boards.
One of Peltz’s most talked about investment was in the British Company, Cadbury Schweppes in late 2006. His Trian Fund Management acquired approximately 3 percent shareholding of Cadbury in 2007 after which the company announced that it would split in to two businesses – one focused on drinks, such as Snapple and Dr Pepper, the other on confectionery, including Dairy Milk.
Another highly regarded investment was in Heinz, where Peltz had a proxy contest with Heinz to put five independent directors on the ketchup maker’s board. Trian succeeded at putting two directors on the board one of them was Mr. Peltz itself.
His appearance on the shareholder register at Pepsi and Mondelez International Inc (NASDAQ:MDLZ), is likely to send tremor through both companies. Both the stocks have been in the news lately; Mondelez and Pepsi performed well last year, but traders are estimating that as a strategy Peltz will push for the merger of both the business.
Mondelez International Inc (NASDAQ:MDLZ)’s brands include Toblerone, Cadbury chocolate and Carte Noire coffee. The business was established after Kraft’s directors announced two years ago a shocking decision to divide the company, which divided Mondelez as a global snacks company and a North American grocery company, still called Kraft. Irene Rosenfeld, famous for her aggressive £12bn takeover of Cadbury in 2010 runs Mondelez. PepsiCo, Inc. (NYSE:PEP)’s brands include Walkers crisps, Doritos and Tropicana juice and of course Pepsi
The talks have been going around that Peltz may ask Pepsi to pursue a merger with Mondelez International Inc (NASDAQ:MDLZ), but the other possibility may be Peltz can also advice PepsiCo, Inc. (NYSE:PEP) to demerge like Kraft food. Mr. Peltz will hold the shares of both the companies as a passive shareholder following his trend.