Provided by Jessica Dinapoli and Svea Herbst-Baylsss
New York (Reuters) – Some Pepsico (PEP) investors support the activist shareholder Elliott Investment Management that the global food and beverage company reduces costs and ditches of sleeping brands such as Quaker,
Elliott said the move, reflecting Coca-Cola (Ko), would increase Pepsiico margin almost a decade ago, allow a $ 200 billion to focus on new chips and garden and turn it into a simpler, more oriented organization.
Earlier this month, Elliott presented a $ 4 billion Pepsico shares in a package of one of its largest investments- and published a 75-page report with ideas for increasing profits in a company with almost 20% decreased in recent years, and last year decreased by 2% of the wider S&P consumer index.
The manufacturer of Mountain Dew, Gatorade, Lay’s, Dorita, Cheeta, and many other brands should start watching the bottling business in the coming months, Elliott report said. However, in the near future, it must first improve its drinking business, which has lost its basis for competitors such as Keurig dr. Peppers dr. Pepper, the risk insurance fund announced in a letter to the company’s board on 2 September.
However, three long -term investors said the separation of bottling bottling is expensive and may take years, further appreciate the profit and income of Pepsico during that time.
“It seems unlikely that the current management team is ready to be reorganized,” said Lehmann, Flossbach von Storch, one of the top 30 Pepsico shareholders, who agreed at first glance, the portfolio manager seems attractive at first glance.
Elliott and Pepsico are constantly conversations about Elliott’s proposal, arguing that a close source of the issue that was not allowed to speak publicly about it.
Pepsiico said it supports active dialogue with shareholders and reviews Elliott’s presentation.
Elliott said in its presentation that Pepsico North American Bearn Business Trails Coca-Cola Action Margling Action Margling as many as 10 percentage points that the company could recover if it rearranged.
Last year, Pepsicico’s margins were 14% compared to 13.1% 2023. Coke reported that during the same periods, the activity margins were 21.2% and 24.7%.
The New York -based Pepsico, whose Addidaveake Cola is the second largest Soda brand worldwide, has been trying to revive sales in the US as consumers push back to price hikes and smaller products.
Its shares increased by more than 6%when Elliott on September 2. Revealed its position, but has since lost all profits and has since decreased by more than 10%.
Elliott refused to comment.
From 2018 Pepsico, headed by CEO Ramon Laguarta, tried to better integrate their chips and “garden” units, which now act as almost separate companies to reduce costs.
The consumer giant also acquired a low -calorie soda Poppi and Mexican and American food manufacturer in the Site, trying to turn to consumers who hire a healthier lifestyle.
Although Elliott did not set the deadline for exactly when and how he wants Pepsiico to repair himself, his involvement shows that the risk insurance fund was dissatisfied with the status quo and disappointed because of his management and perception of the board.
Until now, Elliott has not criticized the Pepsi management team or board publicly, but investors said they remember from other campaigns that the risk insurance fund could increase pressure quickly if its change of change is completely ignored.
Investors and analysts were more favored by Elliott’s offer that Pepsi is losing some smaller brands.
Quaker, purchased in 2001, for the sale of oatmeal labels With Sports Drink Gatorade for $ 13.4 billion, it would probably be about $ 6 billion, Lehmann said.
This money and the savings that the company finds by refusing poorly functioning products could help compensate for the decreasing margins caused by the bottling process, investors and analysts said.
Two recipients of Pepsico franchisees who refused to be named, said they believe the company should distinguish between its company -owners, as local businesses provide better services to nearby retail.
One of the recipients of the franchise said Pepsico often moves around managers to establish contacts with clients.
Pepsico has purchased its largest bottles more than 15 years ago, with an approximately $ 7.8 billion deal, which he says will help speed up decision -making and save each year.
When 2017 Coca-Cola has repeatedly replaced its network of puffs, the efforts that took more than five years have been temporarily reduced because it has been unloaded by generating companies, although margins have eventually improved.
“These are the costs that the company has to pay immediately to repay the capital invested,” said Dave Wagner, Pepsico’s APTU Capital Advisors portfolio manager.
(Jessica Dinapoli and Svea Herbst-Bayliss Report in New York; Matthew Lewis Edit)
