Peltz wants PepsiCo to buy Mondelez International, which has only just been spun off from Kraft, for about $60bn and then sell or spin off its heritage soda business (the Pepsi brands chiefly). PepsiCo would then add its fast-growing Frito-Lay snacks business (with brands like Doritos) to big Mondelez brands like Cadbury, Oreo, Halls and Toblerone.
Which would leave two formidable ladies – PepsiCo’s Indra Nooyi and Mondelez’s Irene Rosenfeld – contending for the top job presumably.
Or maybe not as Nooyi (left) is known to be opposed to such a deal, contending that PepsiCo is doing the right things with its soda portfolio (once the heart of the company) even though there are strong headwinds against fizzy drinks at the moment due to health and lifestyle concerns. Pepsi’s marketing also often leaves observers baffled although the snacks marketing is much better.
Critics of Peltz’s plan also point out that Mondelez has huge exposure to slow-growing Europe (Cadbury was a British brand, Tobler-Suchard Swiss) although Peltz may argue that Europe won’t be in the doldrums for ever so Mondelez may be cheap at the moment.
Peltz’s Plan B is for PepsiCo to dump soda (although it would have to call itself something else); essentially do what Kraft did when it divided itself into a supposedly slower-growing food business and go-go Mondelez. This is deemed by most observers to have been a success.
PepsiCo, because of its snacks business, is actually a bigger business than ancient rival Coca-Cola these days. It may well become a radically different business in the course of 2013.