Activist Investor Daniel Loeb Intensifies Pressure on Nestlé to Reorganize

Daniel Loeb, the hedge fund mogul known for his aggressive investment stances, intensified pressure on Nestlé on Sunday, calling on the board of the global food giant to split the company into three divisions.

In a letter, Loeb noted that his hedge fund, Third Point, had invested more than $3 billion in Nestlé, and called on the board to be “bolder” and “faster” in re-imagining the company.

Loeb said that Nestlé, a Swiss conglomerate whose products range from candy bars to pet food, should be reorganized into three units: beverages, nutrition and groceries.

The letter was the latest salvo in a battle to reform Nestlé. “This is a call for urgency,” Loeb wrote, arguing that the company has not moved with enough speed to shed its less profitable divisions. Loeb has pushed Nestlé before, arguing that it should sell its stake in L’Oréal, the cosmetics-maker.

While Nestlé “has taken some steps consistent with our suggestions,” Loeb wrote, “the modest pace and magnitude of these changes suggest that Nestlé feels satisfied with its position.” He went on, “We are concerned that Nestlé does not fully appreciate the rapidly occurring shifts in consumer behavior that threaten its future.”

Nestlé did not immediately respond to a request for comment.

Just over a year ago, Third Point revealed its stake in Nestlé, a sizable chunk of the hedge fund’s overall portfolio.

Such bold moves have become a signature of Loeb, one of the world’s most visible activist investors and a hedge fund manager who has gone after major companies like Dow Chemical and Sony. Investors like Loeb have increasingly taken large pieces of companies and tried to push them into either selling themselves or breaking up to bolster stock prices.

Jana Partners, for example, helped goad Whole Foods Market into selling itself to Amazon, in a deal valued at $13.4 billion.