Friday, July 20, 2007

Nestle, Pepsi Reported To Have Held Merger Talks

One of the reasons that Nestle has given to walk away from a possible deal with Pepsi is that Pepsi sells too much junk food and drink.


Let me see if I understand this. Nestle, the company that presents itself as healthy and nutritional and has a tag line that says "Good Food, Good Life", is worried about getting into the market for junk food and drink. Fair enough.

I wonder when they found out what Pepsi did for a living? These failed discussions being revealed puts Pepsi in an awkward position.

Egg on face Nestle!

Onésimo Alvarez-Moro

See article:
Nestle and PepsiCo held merger talks in the spring that eventually collapsed over concerns about selling too much junk food as well as structure, according to a published report on Thursday.

The Wall Street Journal reported that PepsiCo (PEP) made an initial approach to Nestle (NSRGY) in the spring, citing a person familiar with the situation.

But Nestle was concerned that a deal with Pepsi would dilute its mission of selling more healthy food and beverages. There were also complications of structuring a deal to combine with the smaller Pepsi, the report said.

Pepsi, in addition to its colas, owns the Frito-Lay brand of potato chips. Nestle also peddles junk food with products such as Scooby-Doo Mystery Pops and the KitKat chocolate bars.

There are currently no talks between Nestle and Pepsi, the newspaper added.

The report did give a boost to Nestle shares, which rose over 2%. Shares of Unilever (UL) , another European consumer products giant, also rose over 2%.

See full Article.