Elliott Investment Management, led by billionaire Paul Singer, has disclosed a USD 4 billion stake in PepsiCo, becoming one of its largest active shareholders with around 2% of the company’s market capitalization. The news sent PepsiCo shares up as much as 6% before closing about 2% higher.
In a letter and presentation to PepsiCo’s board, Elliott outlined a turnaround plan to lift the stock price by 50%. Key measures include refranchising PepsiCo’s bottling network to regional operators — similar to Coca-Cola’s 2017 restructuring — and divesting underperforming or non-core businesses. Analysts suggest that Quaker Foods and syrup brands from its Pearl Milling unit could be candidates.
Elliott criticized PepsiCo’s North America Beverages division for market-share losses to Coca-Cola, Dr Pepper and Sprite, and noted that new product launches such as Starry and SodaStream have strained focus. It also highlighted weakening growth at PepsiCo Foods North America, where Frito-Lay and Quaker have been hit by rising costs and declining volumes. Globally, PepsiCo generates about 60% of its revenues from food, while in North America both beverages and snacks each contribute roughly 30% of annual sales.
PepsiCo has already moved to cut costs, closing two food plants and reviewing logistics, marketing and distribution expenses. At the same time, it is expanding into growth categories with a USD 2 billion acquisition of prebiotic soda brand Poppi and a 5% stake in energy drink maker Celsius. Despite these efforts, PepsiCo’s market value has fallen from USD 270 billion in May 2023 to USD 200 billion today — a 25% drop. Rival Coca-Cola, by contrast, has surged to nearly USD 300 billion.
About a decade ago, activist investor Nelson Peltz and his Trian Fund tried unsuccessfully to force PepsiCo to merge with Mondelez and split its beverages business — highlighting how difficult it has been for outsiders to reshape the company’s strategy.
PepsiCo said it would review Elliott’s proposals “within the context of its strategy to drive sustainable growth” and emphasized its ongoing dialogue with shareholders.
Founded in 1977, Elliott is one of the world’s most prominent activist hedge funds with USD 76 billion under management. The firm is known for its aggressive campaigns at global corporations, most recently targeting Southwest Airlines and Starbucks, and for its long-running legal battle with Argentina over defaulted bonds that ended in a multibillion-dollar settlement.
