PepsiCo(US:PEP) Hua Er Jie Jian Wen·2025-09-02 20:52Group 1 - Elliott Management has made a $4 billion investment in PepsiCo, aiming to push for a strategic overhaul to improve the company's lagging performance [1][4] - The activist investor believes that PepsiCo represents a unique opportunity to revitalize a leading global company and unlock significant shareholder value, projecting a potential stock price increase of at least 50% [1][6] - PepsiCo's stock saw a brief increase of 5% following the news, but closed with a more modest gain of 1.1% [1] Group 2 - PepsiCo is currently facing significant operational challenges, with its core product, Pepsi, dropping to fourth place in U.S. sales behind Coca-Cola, Dr Pepper, and Sprite [4] - The company's food business, which accounts for approximately 60% of total revenue, is also under pressure, with sales growth slowing since late 2022 [4][5] - PepsiCo's market capitalization has decreased from around $270 billion in May 2023 to approximately $200 billion [5] Group 3 - Elliott's proposals include evaluating the possibility of refranchising its bottling network and streamlining its extensive product portfolio by divesting non-core and underperforming assets [6] - The firm emphasizes the need for PepsiCo to provide a more detailed performance improvement plan to restore market confidence [6] - Elliott is recognized as one of the most active activist investors globally, managing over $70 billion in assets and known for driving change in various well-known companies [6] Group 4 - In response to Elliott's pressure, PepsiCo has expressed a willingness to engage in constructive dialogue while defending its existing strategic initiatives aimed at sustainable growth [3][7] - The company has already been taking steps to address its challenges, with CEO Ramon Laguarta focusing on delivering higher value to consumers since taking office in 2018 [7] - Recent financial results exceeded analyst expectations, and the company anticipates a rebound in weak North American demand as strategic adjustments take effect [7][9]