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Mr Loeb wants to innovate Nestlé’s future

Third Point, the American activist investor’s hedge fund, sets its sights on Nestlé

The investment in Nestlé by Third Point and its effects

Third Point, the American activist hedge fund, paid $3.5 billion for a 1.3% stake in the Swiss company Nestlé, whose is one of the most important shareholder. Daniel Loeb, founder and chief executive of  Third Point, wants to bring about changes in the strategy of the Swiss multinational corporation, that takes control of several Italian companies as Buitoni, Perugina, Motta, San Pellegrino, Acqua Panna, Acqua Vera. The Usa investor charges Nestlé with shares significantly underperformed. So, his purpose is to raise Nestle’s profit margin between 18% and 20% by 2020. Currently Swiss company’s profit margin is about 15%. According to Mr Loeb, it is necessary to review the production structure in order to guarantee the best outcome in economic-financial terms.

Daniel Loeb’s bet aims high: the company will spend about SwFr500 million to review its business, giving up the previous outdated Nestlé model. To this effect, Third Point proposes to Nestlé to sell its 23% stake in L’Oréal. A spokesman for Nestlé, for his part, has declared a full openness to dialogue with all of their shareholders and the will to execute their strategies.

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