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(Reuters) - Mondelez International Inc <MDLZ.O>, maker of Cadbury chocolate and Oreo cookies, added activist investor Nelson Peltz to its board in a deal that ends his campaign to have the company merge with PepsiCo Inc <PEP.N>.
Peltz, who is on the PepsiCo board, said last year that Mondelez should be acquired by the beverage giant but that it could also almost double earnings per share by managing costs better.
As part of the agreement with Mondelez, Peltz will not continue his push for a merger with Pepsico, a source familiar with the matter told Reuters.
Mondelez shares fell 2.4 percent to $34.40 in early trading on Tuesday.
J.P. Morgan analyst Ken Goldman said that while the deal avoided an expensive and lengthy proxy battle, some investors who had hoped that Peltz may get more than one seat may be disappointed.
Peltz's Trian Fund Management is Mondelez's fourth-largest shareholder with a 2.3 percent stake, according to Thomson Reuters data. His addition increased the size of Mondelez's board to 12 members, 11 of whom are independent.
Peltz's influence was key in the spinoff of Dr Pepper Snapple Group <DPS.N> from Cadbury, Kraft's purchase of Cadbury, and the subsequent breakup of Kraft into Mondelez and Kraft Foods Group Inc <KRFT.O>.
His New York-based hedge fund's top five holdings include Mondelez, PepsiCo, Wendy's Co <WEN.O> and Family Dollar Stores Inc <FDO.N>.
(Reporting by Aditi Shrivastava and Martinne Geller; Editing by Joyjeet Das and Ted Kerr)