(Reuters) - Mondelez International Inc (>> Mondelez International Inc), 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 (>> PepsiCo, Inc.).

Peltz has been pushing Mondelez to sell itself to the beverage and snacks giant since the middle of last year. He has also said the company could double earnings per share by better managing its costs.

In return for a seat on the Mondelez board, Peltz dropped his push for a merger, a source familiar with the matter told Reuters. PepsiCo had shown no interest in a deal for Mondelez, which has a market value of about $60 billion.

Mondelez shares fell as much as 3.7 percent in morning trading on Tuesday as hopes for a deal evaporated.

Peltz's Trian Fund Management is Mondelez's fourth-largest shareholder, with a 2.3 percent stake, according to Thomson Reuters data. Trian also owns 0.8 percent of PepsiCo.

Now that Peltz has agreed not to pursue a merger, he will turn his attention to pushing for a separation of PepsiCo's snacks and beverage businesses - his "Plan B", Trian spokeswoman Anne Tarbell said. (http://link.reuters.com/kex26v)

Bernstein Research analyst Alexia Howard said Peltz would focus on growing top-line growth and margins at Mondelez.

J.P. Morgan analyst Ken Goldman said that while Mondelez's deal with Peltz avoided an expensive and lengthy proxy battle, some investors who had hoped that Peltz may get more than one seat may have been disappointed.

Peltz's addition to the Mondelez board increased its size to 12, of whom 11 are independent.

Peltz's influence was key in the spinoff of Dr Pepper Snapple Group (>> Dr Pepper Snapple Group Inc.) from Cadbury, Kraft's purchase of Cadbury, and the subsequent breakup of Kraft into Mondelez and Kraft Foods Group Inc (>> Kraft Foods Group Inc).

Apart from Mondelez and PepsiCo, his New York-based hedge fund's top five holdings include Wendy's Co (>> The Wendy's Co), Family Dollar Stores Inc (>> Family Dollar Stores, Inc.) and Ingersoll-Rand Plc (>> Ingersoll-Rand PLC).

Mondelez shares were down 2 percent at $34.51 in early afternoon trading on the Nasdaq, while PepsiCo shares were up 0.6 percent at $82.75 on the New York Stock Exchange.

(Reporting by Aditi Shrivastava and Martinne Geller; Editing by Joyjeet Das and Ted Kerr)

By Aditi Shrivastava