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(Reuters) - PepsiCo Inc said it had elected an adviser at Nelson Peltz's Trian Fund Management to its board, signaling a truce between the company and the activist investor following his two- year push to split the snack and beverage maker.
William Johnson, a former chairman and chief executive officer of H.J. Heinz Co, will join the board effective March 23, and he will also be included in the slate of nominees for election to the board at the company's 2015 annual shareholders' meeting, PepsiCo said.
In July, Peltz said he would consider launching a proxy fight at PepsiCo. The election of Johnson to the board effectively heads off that possibility.
“We have had constructive discussions with Trian for nearly two years," PepsiCo CEO Indra Nooyi said in a statement. "They have provided valuable input to many aspects of our business, and the recommendation of Bill as an independent director to the board.”
Peltz has urged PepsiCo to split its more successful snack division from its beverage business, arguing that the move would reduce costs and unlock value for shareholders. Trian, which is led by Peltz, held a 1.19 percent stake in PepsiCo as of Dec. 31, according to Thomson Reuters data.
Nooyi has said that the company's current strategy as a combined beverage and snack company is working. PepsiCo points to its recent performance: It has beat analyst estimates for earnings per share for 11 quarters in a row and raised its full-year earnings forecast in October.
In a statement, Peltz said, "We support Indra's commitment to operational excellence, which has resulted in improved performance of the company. We are confident that Bill will be a strong and complementary addition to the PepsiCo Board."
Ali Dibadj, an analyst at Sanford Bernstein, called Johnson's election a surprising twist, noting his close relationship with investment firm 3G Capital Partners. 3G teamed up with Warren Buffett's Berkshire Hathaway Inc to buy Heinz in 2013.
"This certainly does suggest a more open stance by PepsiCo to entertain M&A, perhaps even with 3G," Dibadj said in a note. A 3G spokesman did not immediately respond to requests for comment. A PepsiCo spokesman declined to comment.
PepsiCo shares were flat in after-hours trading at $97.29.
Reporting by Shailaja Sharma in Bengaluru; Editing by Sriraj Kalluvila, Leslie Adler and Lisa Shumaker