He’s ba-aack!
Nelson Peltz is once again rattling PepsiCo Chief Executive Indra Nooyi’s chain – pressing for the snack and beverage giant to separate its robust snack food business from its faltering beverage business.
Peltz’s Trian Fund Management has pressed Nooyi for years on this subject but backed off last year when it failed to win a seat on the Purchase, NY, company’s board.
But one week after Nooyi said on Feb. 13 that an “exhaustive” company review found no benefit in a split and that it would continue as now structured, Peltz leaped back into action.
In a 37-page letter to PepsiCo’s board released Thursday, Peltz urged the company to spin off its beverage business, which includes its signature Pepsi and Diet Pepsi brands as well as Tropicana, Gatorade and Aquafina water, from its snack and food business, which has brands such as Fritos, Lays, Tostitos, Doritos and Quaker Foods.
PepsiCo’s North American soda sales, reflecting Americas falling out of love with soda, have declined in each of nine years.
Peltz feels the faltering soda business is weighing the stock price and that, if jettisoned, would allow the snacks and foods business shares to flourish.
Over the last year PepsiCo shares have trailed gained posted by the S&P 500 Index by a 20 percent to 4.6 percent margin.
PepsiCo shares are up 1.6 percent in late morning trading on Thursday.