US: Mondelez takeover "too risky" - PepsiCo CFO
PepsiCo is resisting calls from Nelson Peltz over the future of the business
PepsiCo CFO Hugh Johnston has insisted a takeover of Mondelez International would be "too risky" after calls from activist investor Nelson Peltz to carry out the deal.
Peltz has urged PepsiCo to acquire the owner of Cadbury and Oreo and then spin off its drinks operations, which includes Pepsi cola and Tropicana. The investor has questioned whether PepsiCo should have faster-growing snacks operations and slower-growth drinks businesses in its portfolio.
"We feel like this portfolio is working so well right now and the idea of taking on an US$80bn acqusition and going through all the risk of integration and paying a premium for that business would probably create value for Mondelez shareholders, but I think it's really too risky for PepsiCo shareholders," said Johnston.
"That's why we've been pretty clear: we think we have the portfolio right, we're not interested in doing large deals. We think by focusing on our portfolio [it is] the best way to deliver value for shareholders."
Peltz said earlier this month that PepsiCo is at a "strategic crossroads" with a business structure that was "increasingly unmanageable".
He claimed the best way to maximise value at PepsiCo would be to merge with Mondelez.
If PepsiCo declined to buy Mondelez, an alternative, or "Plan B", Pelzt said, should be to separate its own beverages and snacks business.
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