Shares of Mondelez International, Inc. (MDLZ - Analyst Report) soared to a 52-week high of $30.12 on Friday, Mar 22, 2013, with speculation rife over its possible merger with beverage & snack giant PepsiCo, Inc. (PEP - Analyst Report). The closing price of the food giant on Mar 22, 2013, was $29.73, representing a solid 1-year return of about 18.7% and year-to-date return of about 11.5%. Average volume of shares traded over the last 3 months stands at approximately 12883K.
The Telegraph of London reported last Friday that activist investor Nelson Peltz is fast building stakes in PepsiCo and Mondelez, possibly in pursuit of a large $170 billion merger of the consumer giants.
The exact amount of Peltz’s investment is unknown. However, the news daily citing some unnamed source stated that Peltz could have already spent close to $2 billion to buy major stakes in the food and beverage giants through his investment vehicle, Trian Fund Management.
The news daily conjectured that Peltz may push PepsiCo to either take over Mondelez or split up into 2 separate entities. Shares on PepsiCo and Mondelez catapulted up owing to the merger rumors.
Mondelez emerged from such a split last year when Kraft Foods, Inc was demerged into 2 separate companies, Mondelez and Kraft Foods Group . Kraft Foods Group consists of the North American grocery business of the old Kraft Foods while Mondelez handles the latter’s snack business, which includes brands like Cadbury and Toblerone chocolates.
This speculation of a possible merger comes on the heels of a surprising merger announcement last month, when H.J. Heinz Company with Warren Buffet’s company, Berkshire Hathaway (BRK.B - Analyst Report) and a private Brazilian investment firm, 3G Capital.