Restructuring Kraft

When an activist investor becomes the biggest shareholder of an underperforming food and beverage company, what restructuring steps might he advocate?
Enrique Arzac  | Summer 2008
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In June 2007, Nelsen Peltz's Trian Fund Management became Kraft Food's largest shareholder when it purchased a 3 stake. Given Peltz's reputation as an activist shareholder, it was almost certain he'd advocate for change at Kraft. After all, the food and beverage giant was suffering from depressed margins and had aging, second-tier brands that were ripe for divestiture. In this case students examine Kraft's financials, market share information for rivals such as Cadbury, and the equity value of Kraft, Cadbury and Heinz to consider Peltz's restructuring alternatives.

Case ID: 080310

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