Mondelez's Sugary Valuation Could Cause Wealth Decay
Stephen Simpson, CFA • 14 Comments
Stephen Simpson, CFA • 14 Comments
Oct. 23, 2015, 9:58 AM
- M&A talk in the food sector could set off a chain reaction, according to analysts.
- Kellogg's (K +0.2%) interest in Diamond Foods (DMND +6.6%) and a play by Treehouse Foods (THS +3.1%) for Ralcorp are in advanced stages, but other companies which could be drawn into talks include Boulder Brands (BDBD +0.5%), Amplify Snack Brands (BETR +1.7%), Mondelez International (MDLZ -0.1%), Campbell Soup (CPB +0.1%) and Hain Celestial Group (HAIN +0.4%).
- Private-label brands in particular may look appetizing to larger food companies.
- Previously: Reuters: TreeHouse in talks to buy Ralcorp from ConAgra (Oct. 22 2015)
- Previously: NY Post: Kellogg close to Diamond Foods buyout (Oct. 23 2015)
- Related ETF: PBJ
Oct. 20, 2015, 8:12 AM
- Mondelez International (NASDAQ:MDLZ) announces it invested $50M in a production facility in Nigeria.
- The new facility will be used to meet increasing local demand for Cadbury Bournvita.
Oct. 1, 2015, 4:42 PM
- Mondelez (NASDAQ:MDLZ) is exploring a sale of its European cheese and grocery business, which could be valued at ~$3B, and has hired Goldman Sachs and JPMorgan Chase to seek buyers for the assets, Reuters reports.
- The assets could appeal to companies such as Kraft Heinz (NASDAQ:KHC), as well as P-E firms, according to the report; KHC has right of first refusal for the assets as a result of its spinning off of MDLZ in 2012.
- MDLZ is in the midst of a plan to cut ~$3.5B in costs by the end of 2018.
Sep. 16, 2015, 11:01 AM
- A statement from Anheuser-Busch InBev (BUD +5%) indicates the company must make a formal offer for SABMiller (OTCPK:SBMRY +19.5%) before October 14 or take a pass on the mega-merger to stay in compliance with U.K. law.
- There's a ripple effect with beer stocks circling the globe that includes distributors such as Compania Cervecerias Unidas (CCU +3.1%), Fomento Economico Mexicano (FMX +1.8%), AmBev (ABEV +2.1%).
- Another intriguing aspect of a potential A-B takeover of SABMiller is the side effects on the food industry if 3G Capital is fully engaged on the deal. 3G is a major player in food mergers and a factor in how investors value companies such as Mondelez International (MDLZ +0.2%), PepsiCo (PEP +0.4%), TreeHouse Foods (THS +0.1%), Campbell Soup (CPB +1.9%), JM Smucker (SJM +1.1%), and other food names.
- A-B InBev statement (.pdf)
- Previously: AB InBev prepping offer for SABMiller
- Previously: Beer stock rally with M&A on tap
Sep. 10, 2015, 7:08 AM
- Mondelez International (NASDAQ:MDLZ) presented today at the Barclays Global Consumer Staples conference with a sharp focus on the major cost-cutting measures in place at the company.
- Execs said the measures will help Mondelez to cut overhead as a percentage of revenue by at least 250 bps between 2013 and 2016.
- E-commerce was also a topic. The food seller sees e-commerce bringing in as much as $1B a year by 2020.
- Previous guidance from Mondelez was reaffirmed at the conference.
Aug. 31, 2015, 11:08 AM
- Mondelez International (NASDAQ:MDLZ) selected eight startups to participate in its Shoppers Futures innovation initiative.
- The company plans to help the start-ups launch pilot programs at major retailers and evaluate the results to see if an investment is warranted.
Aug. 20, 2015, 3:20 PM
- 3G Capital continues to be a major influence in the food industry as recent job cuts at Kraft and Heinz send a strong message.
- Management at Nestle (OTCPK:NSRGY), Mondelez International (NASDAQ:MDLZ), Kellogg (NYSE:K), and Campbell Soup (NYSE:CPB) are utilizing a "zero-base budgeting" philosophy similar to the efficiency model pushed by 3G, according to Bloomberg.
- Kraft Heinz (NASDAQ:KHC) is expected to cut $1.5B in annual costs before 2018, a disciplined approach likely to be copied by peers.
Aug. 19, 2015, 11:38 AM
- Large food companies need to focus on bold M&A and innovation actions over recharging iconic brands, concludes Rabobank in a new report on the sector.
- A shift in consumer preferences has sparked a need to introduce new brands which are on trend - instead of focusing on "innovation-lite" and product reformulation strategies. Buying promising brands at an earlier stage than normal is seen as a forward-thinking strategy.
- Related stocks: KHC, MDLZ, PEP, KO, OTCPK:NSRGY, OTCPK:NSRGF, WWAV, HAIN, K, GIS, POST, CPB, PF, THS.
Aug. 14, 2015, 1:44 PM
- Nestle (OTCPK:NSRGY, OTCPK:NSRGF) or General Mills (GIS +0.5%) could make a run at Mondelez International (MDLZ +0.9%) with Berkshire Hathaway and 3G effectively taking themselves out of the bidding process for a few years due to the Kraft-Heinz merger, speculates The Deal.
- A buyer of Mondelez will have to be heavy hitter due to the company's estimated enterprise value of +$90B. PepsiCo (PEP +0.3%) fits the bill and has Nelson Peltz backing the play, but has a board and CEO seemingly uninterested.
Aug. 10, 2015, 7:49 AM| Aug. 10, 2015, 7:49 AM | 10 Comments
Aug. 6, 2015, 12:06 PM
- Pershing Square officially files a report on its investment in Mondelez International (MDLZ +0.5%).
- The position was accumulated in June and July through a large number of transactions in the low-to-mid $40s and included call option activity.
- There's a short note from Pershing that Mondelez is "undervalued" and an attractive investment. Shares of MDLZ have retreated from an early +6% rally.
- Previously: Mondelez International takes flight after Pershing Square bet (Aug. 06 2015)
- SEC Form 13D
Aug. 6, 2015, 9:15 AM
Aug. 6, 2015, 6:59 AM
- Shares of Mondelez International (NASDAQ:MDLZ) fly in premarket trading after Pershing Square confirms that it took a $5.5B stake in the company.
- The food company already has a heavyweight activist as a large shareholder with Trian Fund Management holding a 3% stake.
- "We’ll continue to focus on executing our strategy and on delivering value for all our shareholders," noted Mondelez spokesperson Valerie Moens.
- Mondelez has been the subject of merger/takeover speculation for over a year.
- MDLZ +6.93% premarket to $49.50.
Aug. 5, 2015, 9:55 PM
- Bill Ackman has built a $5.5B stake in Mondelez (NASDAQ:MDLZ), WSJ reports, betting that the snack maker will become the biggest target in a wave of consolidation reshaping the food industry.
- Ackman, who reportedly believes MDLZ must grow revenues faster and cut costs significantly or sell itself to a rival such as Kraft Heinz (NASDAQ:KHC) or PepsiCo (NYSE:PEP), is expected to reveal his firm’s ~7.5% stake as soon as tomorrow.
- Ackman’s arrival in MDLZ squeezes the food company between two of the heaviest hitters in the field, his Pershing Square and Trian Fund, co-founded by Nelson Peltz, who became a MDLZ director in January 2014 as part of a truce following another activist campaign.
Jul. 30, 2015, 8:15 AM
- Margins were on the move at Mondelez International (NASDAQ:MDLZ) in Q2.
- Adjusted operating income margin +270 bps to 15.2%. The company says its on track to meet a 2016 operating income margin target of 15%-16%.
- Latin America organic revenue +19.7% off solid pricing trends.
- North America organic revenue +0.3%.
- Asia Pacific organic revenue +3.0%.
- Guidance: Mondelez increases full-year organic revenue guidance to +3% from +2%.
- Previously: Mondelēz beats by $0.08, beats on revenue
- MDLZ +4.06% premarket to $44.85.
Jul. 30, 2015, 8:03 AM
- Mondelēz (NASDAQ:MDLZ): Q2 EPS of $0.47 beats by $0.08.
- Revenue of $7.67B (-9.1% Y/Y) beats by $180M.
- Shares +3.9% PM.
Mondelez International, Inc. is engaged in the manufacturing and marketing of snack food and beverage products, which include biscuits such as cookies, crackers and salted snacks, chocolate, gum & candy, coffee & powdered beverages and various cheese & grocery products. It operates its business... More
Sector: Consumer Goods
Industry: Food - Major Diversified
Country: United States
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