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CNBC Exclusive: CNBC Exceprts: Trian Partners Founder & CEO Nelson Peltz on CNBC’s “Squawk on the Street” Today

WHEN: TODAY, MONDAY, JULY 17

WHERE: CNBC'S "SQUAWK ON THE STREET"

Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Nelson Peltz, Trian Partners Founder & CEO, today on CNBC's "Squawk on the Street." Following are links to video of the interview on CNBC.com: http://www.cnbc.com/video/2017/07/17/nelson-peltz-pg-has-not-lived-up-to-its-potential-for-quite-some-time.html and http://www.cnbc.com/video/2017/07/17/perhaps-procter-isnt-worldly-enough-jim-cramer.html.

All references must be sourced to CNBC.

PELTZ ON P&G

IF YOU LOOK AT MARKET SHARE IT IS FOR A TEN YEAR, FIVE YEAR, FOUR YEAR, WHATEVER PERIOD OF TIME YOU WANT TO LOOK AT IT IS LOSING MARKET SHARE. BUT YET IT'S THE ONLY COMPANY OUT THERE IN THE CONSUMER SPACE THAT HAS OVER 20 BILLION PLUS DOLLAR BRANDS. BUT WHEN YOU HAVE THAT MANY BRANDS THEY TEND TO START TO GET COMMODITIZED. THEY START TO LOSE MARKET SHARE. AND THE WAY YOU COUNTERACT THAT IS YOU HAVE A COMPANY THAT IS GOOD AT EITHER INCUBATING NEW BRANDS, BUILDING NEW BRANDS, ACQUIRING NEW BRANDS.

PELTZ ON SOMETHINGS WRONG WITH P&G

P&G'S AVERAGE SELLING PRICE ACROSS THE PRODUCT LINE IS 40% HIGHER THAN THE REST OF THE INDUSTRY. THEY ARE ALSO NUMBER 1, BUT THEIR MARGINS ALBEIT ARE RIGHT UP WITH THE TOP GUYS IN THE BUSINESS THEYRE BIGGER THAN ANYBODY ELSE THEY HAVE THIS 40% PRICE ADVANTAGE. SOMETHING'S WRONG. SOMETHING IS WRONG. THEY'VE TAKING 10 BILLION OF COSTS OUT SINCE 2012 WE CAN'T FIND A PENNY OF IT.

PELTZ ON CULTURE

I SPOKE TO A LOT OF THE EX-GILLETTE GUYS AND YOU KNOW WHAT THEY SAID; IF DOLLAR SHAVE CLUB AND IF LARRYS OR HARRYS WHOEVER THE OTHER GUY IS WERE AROUND WHEN THEY WERE RUNNING GILLETTE THEY WOULD HAVE PUT A GROUP OF THEM TOGETHER FIVE OR TEN GUYS IN A ROOM AND SAY HOW DO WE PUT THESE GUYS OUT OF BUSINESS NOW. THAT'S WHAT SHOULD HAVE HAPPENED YEARS AGO. DIDN'T HAPPEN BECAUSE YOU REPLACED GILLETTE PEOPLE WITH P&G PEOPLE. VERY DIFFERENT CULTURE.

PELTZ ON P&G 2

YOU HAVE PEOPLE AT P&G FOR THE MOST PART. NOT FOR THE MOST PART, BUT 99%. WHO HAVE NEVER HAD ANOTHER JOB BUT P&G. ONE OF THE THINGS WE TOLD THEM IS YOUR TOP 100 EXECUTIVES YOU SHOULD AND I AM NOT TALKING ABOUT TAXES AND LAWYERS I'M TALKING ABOUT THOSE THAT RUN THE ORGANIZATION YOU SHOULD HAVE A SOFT TARGET THAT AT LEAST 25 OF THEM COME FROM OTHER COMPANIES BECAUSE THESE GUYS ONLY KNOW ONE PLAYBOOK AT P&G. AND WHEN THEY GET TOGETHER TO SOLVE A PROBLEM DO YOU KNOW WHAT THEY'RE DOING? THEY'RE TALKING TO THEMSELVES.

PELTZ ON NEW BRANDS

YOU HAVE A COMPANY THAT IS GOOD AT EITHER INCUBATING NEW BRANDS, BUILDING NEW BRANDS, ACQUIRING NEW BRANDS. AND YOU HAVE THOSE TWO, THREE HUNDRED MILLION DOLLAR BRANDS THAT GROW AND TAKE MARKET SHARE. P&G BECAUSE OF ITS SUFFOCATING BUREAUCRACY BECAUSE OF ITS MATRIX ORGANIZATION HAS BEEN UNABLE TO DO THAT IT IS STRUCTURED IMPROPERLY FOR IT TO DO THAT

PELTZ ON LONG TERM

I TOLD THOSE GUYS AS OLD AS I AM, I'M LOOKING TO P&G IN 2030, I WANT BOARDS AND MANAGEMENT TO ACT LIKE THEIR ENTIRE NET WORTH IS TIED UP IN THAT COMPANY. THAT'S WHAT WE ARE LOOKING FOR SO WE ARE NOT LOOKING TO THE NEXT QUARTER WE WANT THEM TO WEAR BIFOCALS. THE NEXT QUARTER IS IMPORTANT BUT WHAT YOU HAVE TO REALLY KEEP YOUR EYE ON IS THE LONG TERM