Elliott Investment Management has accumulated a stake of about $4 billion in PepsiCo Inc., the Wall Street Journal reported, citing people familiar with the matter.
The holding represents one of Elliott’s largest equity investments and places it among PepsiCo’s five biggest active shareholders, excluding index funds, according to the report.
The newspaper said Elliott intends to push for changes at the beverage and snacks maker but noted that the firm’s specific plans to influence the company’s strategy were not immediately clear.
PepsiCo shares gained following the news.
The stock rose 5% to $156.06 after the Wall Street Journal reported that Elliott was preparing a “major activist campaign,” the publication said, attributing the information to people familiar with the matter.
Broader equity markets moved in the opposite direction, with futures linked to the S&P 500 and Nasdaq Composite falling 0.8% and 1%, respectively.
PepsiCo’s challenges
PepsiCo has been under pressure from changing consumer tastes, tariff-related headwinds and intensifying competition in both beverages and snacks.
Pepsi has been focused on cutting costs and boosting profit margins. During the quarter, the company shut two manufacturing plants tied to its North American food operations.
It said efforts are underway to streamline transportation and logistics, while marketing spending is being reviewed to ensure stronger returns on investment.
Its market capitalisation has contracted by more than 25% in just over two years, dropping from a peak of $270 billion in May 2023 to about $200 billion.
The company’s July earnings report offered a short-term boost to its shares, but results also showed that volumes in its North American food and beverage businesses slipped slightly.
Once a strong competitor to Coca-Cola, Pepsi’s flagship cola has slipped in the US market.
Beverage Digest data shows that Pepsi now ranks fourth in sales volume, behind Coca-Cola, Dr Pepper—owned by Keurig Dr Pepper—and Coca-Cola’s Sprite.
PepsiCo’s portfolio extends beyond its namesake cola to include Mountain Dew, Gatorade, Lay’s, Doritos and Quaker Oats.
It has sought to broaden its offerings with acquisitions such as probiotic soda brand Poppi and tortilla-chip maker Siete Foods.
Elliott’s track record
Elliott, which manages more than $76 billion in assets, has a history of taking activist positions in major corporations.
Last year, it invested over $5 billion in Honeywell and urged the industrial conglomerate to consider breaking up its business.
Honeywell later outlined restructuring plans and gave Elliott a seat on its board.
The activist also took a significant stake in Starbucks, where it influenced management changes after the coffee chain faced slowing sales and evolving consumer demand.
Elliott’s stake in PepsiCo, one of its largest ever, continues that pattern of targeting prominent consumer companies facing strategic challenges.
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