Valued interaction with Nooyi: Nelson Peltz

PepsiCo’s former billionaire investor Nelson Peltz, who canvassed aggressively to split the soda and snacks maker under Indra Nooyi for three years, said he valued the interaction with the outgoing chief executive officer.

“Trian Fund Management LP has appreciated its constructive engagement with Indra Nooyi over the years,” founder Peltz said in an email response to ET on Wednesday.

The US beverage and snacks maker’s pre-market stock price had risen after PepsiCo said earlier this week that Nooyi would step down after heading the company for 12 years. Some analysts predicted her departure may pave the way for a division of the company.


The Trian Fund sold its close to 1% stake in PepsiCo, valued at $2 billion, in mid-2016 after its aggressive campaign to push for splitting the company’s fast-moving snacks business from the declining carbonated drinks segment failed. Peltz had said keeping both product lines together was weighing down on overall shareholder value and impacting investors. He had maintained that splitting the two businesses would free up the maker of Pepsi cola and Lay’s snacks to pursue separate management strategies.

Chennai-born Nooyi, however, opposed the move, arguing that PepsiCo could leverage retail clout with both businesses together as well as cross-promote brands from both categories.

In India, PepsiCo has been grappling with falling sales of carbonated soft drinks and conceding market share to rivals including Coca-Cola and regional brands. PepsiCo’s revenue dropped to Rs 6,540 crore in fiscal 2017 even as it continued to include healthier products instead of offering only sugary drinks and salty snacks.

Analysts said Nooyi’s departure could lead to a split now.

“This transition could open a wider door to Pepsi considering a variety of potential alternatives, including stepped up refranchising... even potentially splitting up the company,” Wells Fargo analyst Bonnie Herzog wrote in a report.

Trian Fund Management declined comment on whether Peltz believed Nooyi’s successor Ramon Laguarta would split up snacks from beverages.