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Nelson Peltz Takes a Position in $PEP & $MDLZ, Investors Expect a Merger

“(Reuters) – Shares in top U.S. packaged food companies Mondelez International Inc and PepsiCo Incjumped on Friday on speculation that they could merge, after a report that activist investor Nelson Peltz has taken stakes in each.

Citing sources familiar with the matter, Britain’s Daily Telegraph reported that Peltz had spent $2 billion on shares of the companies through his investment vehicle, Trian Fund Management. The paper speculated that Peltz could then push for a merger of the two companies.

The often speculated-upon marriage between PepsiCo and Mondelez would bring together salty snacks like Doritos and Tostitos with sweets like Cadbury chocolate and Oreo cookies. The resulting behemoth would have more than $100 billion in revenue and $20 billion of operating earnings per year.

A deal would also reunite Mondelez Chief Executive Irene Rosenfeld with Frito-Lay, which she ran for two years before taking the reins at Kraft in 2006.

A spokeswoman for Trian declined to comment on the report. Spokesmen for PepsiCo and Mondelez declined to comment on “rumor or speculation” regarding any Trian stake, though both indicated the companies were happy with where they were now.

“We’re satisfied with the portfolio where it stands today,” said a Mondelez spokesman.

“We are making strong progress in our strategy to deliver long-term growth and create shareholder value,” said a PepsiCo spokesman. “We do not see the need for any large scale M&A.” …”

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