By Laura Cooper
PepsiCo struck an agreement with activist investor Elliott Investment Management, committing to cut costs across the company and lower prices in an effort to jump-start its slowing food business.
The maker of Pepsi-Cola, Lay's and Doritos said it would reduce expenses in its food and beverages operations, while cutting the number of individual products by 20% across its U.S. businesses. PepsiCo also plans to lower prices for some food products in the New Year.
"There's a big reset of affordability because we see the consumer struggling in the U.S. and in many Western countries," said PepsiCo Chief Executive Ramon Laguarta in an interview.
Alongside the agreement, the company said Monday it expects full-year organic revenue growth to be between 2% and 4% in 2026. PepsiCo said in a statement it expects to deliver results at the high end of the range during the second half of 2026.
The agreement doesn't include Elliott representatives joining PepsiCo's board. Elliott will continue to work with the company moving forward.
The deal avoids a potentially long and costly battle between PepsiCo and Elliott, one of Wall Street's most prominent activist firms. In September, Elliott unveiled a roughly $4 billion stake in the company, one of the firm's largest equity positions ever, which ranked it among PepsiCo's biggest investors.
PepsiCo shares settled 0.4% higher Monday, with broader U.S. stock indexes slightly down. Bloomberg News previously reported some details of the agreement. The Wall Street Journal reported last week that PepsiCo was close to striking a deal with Elliott.
The deal followed meetings between Elliott, PepsiCo and other investors, including at the company's Purchase, N.Y., offices. On a call with investors in October, Laguarta described the company's engagement with Elliott as constructive and collaborative.
PepsiCo this year has closed three manufacturing plants and several manufacturing lines. Savings from such efforts can be used for lower prices in the food business, Laguarta said. "We will take the money we save here and put it back into portfolio expansion, affordability and driving growth," he said.
The company has laid off some workers as it has reduced costs this year, and announced further reductions this week.
PepsiCo has been working to revive its U.S. food business, where sales have flagged after consumers began pulling back on spending and seeking healthier options. The company is adding more protein- and fiber-laden products and recently revamped its Lay's potato chip brand.
In PepsiCo's flagship beverage business, which includes Pepsi-Cola, Mountain Dew and Gatorade, the company has focused on expanding sugar-free beverages, recently holding its "Pepsi Challenge" with Pepsi Zero Sugar. It recently unveiled a prebiotic version of its classic Pepsi cola.
Write to Laura Cooper at laura.cooper@wsj.com
(END) Dow Jones Newswires
December 08, 2025 17:50 ET (22:50 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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