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!
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%.
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