Activist investor Bill Ackman takes aim at Mondelez food

Activist investor Bill Ackman is paying approximately $5.5 billion for a 7.5 percent stake in Mondelez worldwide Inc., the maker of products, including Oreo cookies and Cadbury chocolate, according to reports, Thursday, August 6, 2015.

The Wall Street Journal, which first reported that Ackman had built a stake in Mondelez, said the activist investor wanted the snack maker to grow revenue faster and cut costs significantly or sell itself to a rival.

In June, Ackman took a 22-per cent stake in Nomad Holdings Ltd, a so-called special-purpose acquisition company, or SPAC.

That deal was orchestrated by Heinz’ owners, Warren Buffett’s Berkshire Hathaway and the Brazilian investment firm 3G Capital.

For Mondelez worldwide Inc. and its chief executive, Irene Rosenfeld, William Ackman’s investment is the latest jolt in a yearslong roller-coaster ride of activism and corporate restructuring.

In an earlier story in the WSJ that broke the news of Ackman’s position in Mondelez, Gaspasso, David Benoit and Liz Hoffman suggest that Kraft Heinz – formed earlier this year – is one potential buyer of the company. Amid slack performance, Mondelez continued to face investor pressure, with Nelson Peltz’s Trian Management arguing the company should be sold to PepsiCo’s PepsiCo’s FritoLay brand division.

Mondelez is not unfamiliar with activist investors.

Pershing Square said on Wednesday it held a 7.5 per cent stake in Deerfield, Illinois-based Mondelez, including forward purchase contracts and call options.

“We welcome Pershing Square as investors in our company”, Mondelez spokeswoman Valérie Moens said in a formal statement issued by the firm.

He starting buildling shares in both Mondelez and Pepsi in 2013, before pushing for a multi-billion pound merger of the two consumer giants, which failed to gain support from shareholders. “We’ll continue to focus on executing our strategy and on delivering value for all our shareholders”. During the split, Mondelez took many packaged foods brands like Ritz, Triscuits and Nabisco, while Kraft Foods retained refrigerated foods brands like Polly-O cheese and Oscar Mayer meats. A month after he joined the board, it said it had adopted a cost-cutting tool favored by 3G known as zero-based budgeting, which requires managers to justify all costs every year instead of working off the prior year’s spending.

US-listed Mondelez’s stock rose more than 5pc percent on the news on Thursday.

Billionaire Bill Ackman’s hedge fund amassed a $5.6 billion stake in snack giant Mondelez global, part of a push for consolidation in an industry hampered by slowing growth and a shift toward healthier eating.