Dive Brief:
- Nelson Peltz, the activist investor who has been a thorn in the side of Mondelez International's senior management team, has struck a deal with the company and sheathed his sword.
- As part of the deal, Peltz will join the Mondelez board of directors. As a board member, Peltz is expected to cease his call for PepsiCo to spin off its snack business and acquire Mondelez.
- Peltz' Trian Fund Management owns about 2.3% of Mondelez' shares, making it one of the largest shareholders in the maker of Oreo cookies, Trident gum and a slew of other brands.
Dive Insight:
Pity the folks at Mondelez. There are few folks more offputting than Nelson Peltz. He is, after all, the man who complained that the Mondelez name, created in a contest for employees and meant to evoke an international aura, "sounded like a disease." He's also the guy who waged a long battle with Heinz that eventually led to that company being sold off to private equity. And we all know how badly that has worked out for the employees and other stakeholders at Heinz.
So what will Peltz push for now that PepsiCo has rejected his ideas and Mondelez has decided to try to bring him into the fold? Cost cutting.
Look for an end to research programs, a scaling back of plant revamps, and a rise in layoffs.
A proxy war has been averted. And that's a good thing. But years from now, the folks from Mondelez may very well feel that the price they paid for that peace was too high.