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Mondelez Up on Divestiture Talk; Is a Deal With Pepsi on the Horizon? -- Barron's Blog

DOW JONES & COMPANY, INC. 11:20 AM ET 10/2/2015

Symbol Last Price Change
MDLZ 42.42up +0.21 (+0.5%)
PEP 93.24down -0.61 (-0.65%)
QUOTES AS OF 12:01:17 PM ET 10/02/2015

Is Mondelez's(MDLZ) move to divest itself of its European cheese business a sign that a merger with Pepsi ( PEP) is on the horizon?

According to Reuters, Mondelez(MDLZ) is seeking buyers for its European cheese and grocery assets to focus on its snack business. And Normura analyst David Hayes had this to say:

The divestiture of the grocery business may be seen by some as another step to streamline Mondelez(MDLZ) into a snacks-only business, thus making it a better fit for a merger with Pepsico's(PEP)Frito Lay (snack) business.

Whether Mondelez(MDLZ) will remain a stand-alone company or become the latest target in a string of big corporate deals has been the topic of no small amount of speculation.

Activist investor Bill Ackman is sweet on the stock. He argues that while it has value as a standalone company, if may need to pursue a deal if management doesn't get the business "to its potential in reasonably rapid fashion." Some speculate that Mondelez(MDLZ) could get snapped up by Kraft Heinz ( KHC). But speculation of a deal with the soft drink and snack food giant has circulated ever since Trian Fund Management LP'sNelson Peltz first pushed for the marriage a few years ago.

At a recent $42.37, Mondelez(MDLZ) rose 0.4% in today's market action, while Pepsi fell 0.85%.

More at Barron's Stocks to Watch blog, http://blogs.barrons.com/stockstowatchtoday/


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10-02-151120ET
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