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Activist investor takes a $4 billion
stake in PepsiCo, seeing a path to revive sales
[September 03, 2025]
By MICHELLE CHAPMAN
Activist
investor Elliott Investment Management is taking a $4 billion stake in
PepsiCo, saying there's an opportunity to revive the snack and drinks
company.
Years of
double-digit price increases from PepsiCo and changing customer
preferences has weakened demand for its drinks and snacks, the company
said in February. In July PepsiCo said that it is trying to combat
perceptions that its products are too expensive by expanding
distribution of value brands like Chester’s and Santitas. |
In this May 30, 2012, file photo, a Pepsi logo is seen on a delivery
truck in Springfield, Ill. PepsiCo Inc. on Thursday, July 9, 2015,
reported second-quarter net income of $1.98 billion. (AP Photo/Seth
Perlman, File) |
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Stubborn inflation has had an impact on consumer behavior and
many people have cut back on the discretionary purchases that
they make.
PepsiCo lowered its full-year earnings expectations in April,
citing increased costs from tariffs and a pullback in consumer
spending. The company reaffirmed that guidance three months
later. Its tariff costs have risen since then. In June, the
Trump administration hiked the tariff on imported aluminum from
25% to 50%.
In a letter to PepsiCo's board, Elliott said that the company is
being hurt by a lack of strategic clarity, decelerating growth
and eroding profitability in its North American food and
beverage businesses. But the firm still believes in PepsiCo's
potential, particularly noting its growing international
business.
“While unfortunate, this disappointing trajectory has created a
historic opportunity: With the right mindset and an
appropriately ambitious turnaround plan, PepsiCo today
represents a rare chance to revitalize a leading global
enterprise and unlock significant shareholder value,” Elliott
said.
Shares of PepsiCo climbed 2% Tuesday. The stock is down nearly
10% over the past 12 months, according to FactSet, but it is up
almost 12% over the past month as Elliott has purchased shares.
Elliott said that it wants to work with PepsiCo's board and
management on ways to improve performance.
“Elliott’s goals at PepsiCo are straightforward: help the
company sharpen focus, drive innovation, become more efficient
and unlock the value that its leading brands, unmatched scale
and world-class employees deserve,” it said. “The path back to
winning is clear and achievable.”
PepsiCo will review Elliott's recommendations.
“PepsiCo maintains an active and productive dialogue with our
shareholders and values constructive input on delivering
long-term shareholder value,” it said in a statement Tuesday.
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