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updated: 4/19/2013 9:17 AM

Activist investor discloses stakes in Mondelez, PepsiCo

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Associated Press

NEW YORK -- Activist investor Nelson Peltz has disclosed stakes in Mondelez and PepsiCo, following earlier reports that the billionaire could be pushing for a marriage between the sweet and salty snack giants.

In a statement early Friday, PepsiCo also disclosed that it has held meetings with Peltz's Trian Fund Management in recent weeks to consider its "ideas and initiatives" for long-term growth. A spokesman for Mondelez said the company doesn't comment on contact with specific shareholders.

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A representative for Trian declined to comment.

Peltz's disclosures come at a sensitive time for the two U.S. food and drink makers. Mondelez, which makes Oreo cookies and Cadbury chocolates, has stumbled in its first quarters as an independent company after splitting from Kraft Foods.

PepsiCo, which makes Frito-Lay, Tropicana and Quaker Oats, is reviewing restructuring options for its underperforming North American beverage business, including a possible spinoff. If that were to happen, analysts have speculated that PepsiCo would want to buy another snack food maker to remain as big as it is today.

It could be that Peltz has no intention to agitate for a merger. But the New York native is known for building stakes in companies then forcing change.

In 2008, for example, he led a group of investors in pressuring Cadbury Schweppes to split its candy and its weaker beverage business, which later became Dr Pepper Snapple Group Inc.

In a filing with the Securities and Exchange Commission Friday, Trian said it held a $494.2 million stake in Mondelez and a $269.1 million stake in PepsiCo as of Dec. 31.

Meanwhile, Mondelez International Inc. and PepsiCo Inc. have each undergone radical restructuring under their CEOs in recent years and are under pressure to deliver improved results.

Mondelez CEO Irene Rosenfeld is no stranger to corporate restructuring, having been at the center of some of the industry's biggest deals in recent years.

After rising through the ranks at Kraft Foods and its predecessor company for more than two decades, Rosenfeld left for a stint as the head of PepsiCo's Frito-Lay between 2004 and 2006.

She returned to Kraft as CEO a few years later, then orchestrated the purchase of Cadbury, despite bitter resistance from workers at the British candy company and skepticism from shareholders, including Warren Buffett.

The deal greatly extended Kraft's reach in key international markets and laid the groundwork for what came next -- the company's split.

Its international snack unit, which was made significantly bigger by the Cadbury deal, would be headed by Rosenfeld and be called Mondelez. The other company held onto the Kraft name, along with North American grocery brands such as Jell-O, Oscar Mayer and Velveeta.

Mondelez was supposed to grow at a faster rate but the company's first few quarters have disappointed investors. And last week, activist investor Bill Ackman disclosed a stake in the company. Ackman's Pershing Square Capital Management said its stake was worth $152.3 million.

On Friday, Mondelez issued a brief statement noting that "it has created significant value through our transformation."

Over at PepsiCo, Indra Nooyi became CEO in 2006 but has been playing a role in the company's evolution for far longer.

The company spun off KFC, Pizza Hut and Taco Bell in 1997. It then acquired Tropicana in 1998, Quaker Oats in 2000 and Naked Juice in 2006 due in part to her influence, as the company moved to add to its healthier offerings. And more changes could be on the way.

The Purchase, N.Y., company is set to provide an update early next year on a review of its North American beverage business, which for years has lagged the Coca-Cola Co.

It reported first-quarter results this week that beat Wall Street expectations. But the North American beverage unit remained a drag, despite significant marketing investments over the past year. The company attributed the decline in beverage volume in part to its new strategy on keeping prices more even throughout the year, rather than discounting heavily during holidays.

In its statement Friday, PepsiCo noted that Trian is a "respected investor" and that it looked forward to "continuing constructive discussions with them."

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