GO
Loading...

Forget PepsiCo, ‘this’ company should buy Mondelez: Cramer

(Click for video linked to a searchable transcript of this Mad Money segment)

There's been speculation in the market that Mondelez may be attracting suitors. Cramer thinks if anybody buys, it should be this company – and no it's not PepsiCo.

It's Coca-Cola.

The Mad Money host drew that conclusion after Coke released results that disappointed the Street with Coke chairman and CEO Muhtar Kent blaming the global recovery and the weather for weakness: "Our second quarter volume results came in below our expectations, reflecting an ongoing challenging global macroeconomic environment and unusually poor weather conditions in the quarter," he said.

Cramer was stunned by the commentary. "Challenging global macro conditions? What? – Coke isn't a car. It's not even a washing machine!" That is, Cramer doesn't believe very many people stop buying Coke because they're worried about the global economy as Muhtar Kent suggested.

"And weather? Do we stop drinking Coke if it is cooler or rainier in some places? That didn't hold a lot of water with me, either" Cramer said.

Instead the Mad Money host thinks Coke's business model simply relies too much on the popularity of carbonated sodas – especially its namesake beverage.

Getty Images

"In a world where both sugary and sugar-free soft drinks are under fire for health considerations, I think some diversification away from those drinks would be good for Coca Cola," Cramer said.

And the Mad Money host believes if Coke were to acquire Mondelez, the snack maker spun-off from Kraft, the products would round out Coke's portfolio quite nicely.

"I think the model could be as good for Coke as it is for PepsiCo," Cramer added.

---------------------------------------------------------
Read More from Mad Money with Jim Cramer
3 deals in 2 weeks that Cramer would 'buy'
Small change with big market implications
Goldman downgrade mistaken, says Cramer
---------------------------------------------------------

That is, PepsiCo's Frito Lay division has been a driver of growth with PepsiCo CEO Indra Nooyi focused on healthier snacks.

"To me the combination of the Frito Lay division and the drinks division is what's making PEP the stand out here," Cramer said. "Looking at the latest results, I think Coke told us that it's not enough to be just a drink company, anymore."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Symbol
Price
 
Change
%Change
PEP
---
KO
---
MDLZ
---
KRFT
---

Featured

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.