Nestle plans share buyback after pressure from billionaire

Billionaire Dan Loeb has already managed to extract a few sweeteners from Nestle.

The world’s largest packaged foods company, under pressure from Loeb’s hedge fund to sell off assets, said Tuesday it will begin a nearly $20 billion share buyback program beginning next month, which will extend over the next three years.

The chocolate conglomerate also said that it will train its focus on “high-growth” food and beverage categories such as coffee and bottled water.

Nestle’s announcement comes just two days after Loeb’s hedge fund Third Point disclosed a $3.5 billion stake in the company — its largest investment ever.

Loeb bemoaned the company’s “staid” corporate culture in a letter sent to investors Sunday evening. Still, the hedgie appeared to offer support for recently-appointed CEO Ulf Mark Schneider, citing his “impressive track record” in his previous role as CEO of a German medical supply company.

The hedge fund’s eight-page letter may have been enough to get the ball rolling.

Loeb said Nestle should re-evaluate its brand portfolio, applauding its already-announced plans to consider a sale of its US candy business. Loeb also pushed for the company to consider share buybacks and selling its 29 percent stake in L’Oreal.

Representatives for Third Point declined to comment.

Shares of Nestle were up 1.3 percent at $89.32 in afternoon trades.