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Global snack company, Mondelez International, Inc. (MDLZ - Analyst Report) recently announced that activist investor, Nelson Peltz, has joined its board of directors. Media reports say that Peltz will not pursue his agenda of merging Mondelez with food and beverage giant, PepsiCo, Inc. (PEP - Analyst Report).

Last year, Peltz had pushed Pepsi to take over Mondelez and then spin-off its underperforming beverage business. Peltz’s investment company, Trian Fund Management, holds major stakes in both the food companies. Peltz believed that shifting consumer preferences toward health and wellness and “good-for-you” products is lowering the demand for high-calorie soft drinks. Thus, beverage giants like Pepsi and The Coca-Cola Company (KO - Analyst Report) are witnessing declining sales of carbonated beverages, especially the colas. Peltz felt Pepsi’s underperforming beverage business is overshadowing its fast growing snack unit.

Peltz had also urged Pepsi to divest the Frito Lay unit in case it does not want to go ahead with the Mondelez merger.

However, earlier this month, in an interview to CNBC, Pepsi’s chief executive officer, Indra Nooyi, said there is no need to split the beverage and snacks businesses. Nooyi insisted that the businesses are complementary and “better together”, not just in the United States but worldwide.

Peltz's addition to the Mondelez board would expand it to 12 members, 11 of whom are independent. Mr. Peltz will also be nominated for board elections at this year's annual meeting.

Mondelez was previously known as Kraft Foods, Inc. and changed its name to Mondelez following the spin-off of its North American grocery business into a separate independent company, Kraft Foods Group, Inc. (KRFT - Analyst Report) in Oct 2012. Ever since the split, the Cadbury chocolates and Trident gum maker has been struggling with its top line.

Currently, Mondelez has a Zacks Rank #2 (Buy).

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