Giant international snackfood and confectionery company Mondelēz International, which is led by Irene Rosenfeld as Chairman and CEO, announced yesterday that prominent hedge fund manager, and activist investor, Nelson Peltz is joining its Board of Directors. Nelson Peltz heads up the private equity firm Trian Fund Management.
This addition expands the Mondelēz International Board of Directors to 12 members, 11 of whom are independent and all of whom are elected annually in what is a model now for proponents of sound governance practices.
“We believe that Nelson will be a valuable addition to our Board, ” said Irene Rosenfeld, Chairman and CEO. “We respect his more than 40 years of business and investment experience as well as his expertise helping consumer products companies leverage their brands and improve operating and financial performance. We welcome his input as we deliver superior shareholder returns.”
Mark Ketchum, Lead Director who represents the independent Directors said, “We’re pleased to have Nelson join our Board and are confident that he will be an important contributor, ”… “As one of the company’s largest shareholders, with a current beneficial ownership of more than 46 million shares, Trian has long seen enormous opportunities in the company’s portfolio of strong global brands, ” said Peltz. “Irene Rosenfeld is a CEO who has created substantial value for shareholders over the course of her career. I look forward to working closely and constructively with Irene, the Board and management team toward our shared goals of driving growth, improving margins and increasing value for all shareholders.”
In 2012 Irene Rosenfeld led the charge after activist investors, including Peltz had come knocking, to split up her company the Kraft Food Group instead, spinning-out to its own shareholders their domestic wholesale food division, which took the company name with it as Kraft Foods. The rest of the company stayed under its former roof, but was renamed Mondelēz International and comprises all its snack food and confectionary businesses.
Last summer Nelson Peltz had been pushing for Pepsico, in which he is also an investor, to merge its own snack food business with Mondelēz, though the idea did not fly.
Mondelēz shares have performed quite well since then so relations obviously settled down, and then today the news of the appointment surface in a corporate press release. It is likely Peltz has made his peace with the company though will likely continue to push hard for cost cuts moving forward. With 1.75 billion shares outstanding the company currently has a market capitalization of over US$60 billion. Trian’s 41 million shares represent just 2.33% of the stock he has parlayed a board seat on very little and thoroughly deserves congratulating.
Some commentators had thought the move might signify a renewed push for the merger with Pepsico’s snack food division. However we hear just this morning from Davos, where all the world’s CEOS are converging this week for the annual business conference there, that CNBC has just spoken to Nelson Peltz by phone. Peltz confirmed to them directly that as part of the agreement with Mondelēz for his joining their Board of Directors he would specifically not push for such a merger.
It also seems Peltz apparently had earlier criticized the company’s name Mondelēz to the same reporter, and expressed a hope it could be changed to make it more digestible for investors in the future. Hear hear; this writer would agree with that. However Peltz now says he will simply work with the company’s Chairman Irene Rosenfeld to try and make the name work.
Irene Rosenfeld / Getty
About Nelson Peltz
Nelson Peltz was born and raised in Brooklyn, New York, going on to study at the Wharton School of the University of Pennsylvania. In 1963 he dropped out of school at the age of 21 to join his family’s wholesale food distribution business in New York. After building it up, from a $2.5 million business into a publicly held company with $150 million in sales, he sold it fifteen years later.
He then formed Triangle Industries, with a partner Peter May, growing that business into a Fortune 100 industrial company during the seventies and eighties, before selling out to Pechiney in 1988. Peltz and May, now long term business partners, subsequently formed Triarc Company, and acquired the Snapple brand of drinks from Quaker Oats, which they later sold on to Cadbury Schweppes in 2000.
In 2005 Nelson Peltz, May and a third partner Ed Garden, founded Trian Fund Management, which has since made large-scale investments in a number of companies including Wendy’s, Heinz, Cadbury, Kraft Foods, Family Dollar and Domino’s Pizza. Nelson Peltz currently serves as non-executive Chairman of The Wendy’s Company, the second-largest quick service restaurant company in the United States, and sits on the board of a number of prominent American companies.
He has homes in both California and New York as well as one of the most expensive homes in the United States, Montsorrel, in Palm Beach, Florida. With a current net worth estimated to be around US$1.1 billion, Nelson Peltz is well-known for supporting philanthropic causes, and especially many Jewish and Israeli charities.
About Trian Fund Management
Trian seeks to invest in high quality but undervalued and under-performing public companies and to work constructively with the management and boards of those companies to significantly enhance shareholder value for all shareholders through a combination of improved operational execution, strategic redirection, more efficient capital allocation and increased focus.
About Mondelez International
Mondelēz International today is a global snack food manufacturing corporation, with revenues of US$35 billion in 2012. Operating in 165 countries, Mondelēz International is a world leader in chocolate, biscuits, gum, candy, coffee and powdered beverages. The company’s many billion-dollar brands include Cadbury, Cadbury Dairy Milk and Milka chocolate, Jacobs coffee, LU, Nabisco and Oreo biscuits, Tang powdered beverages and Trident gum.