Nestle SA is being targeted by activist investor Dan Loeb's hedge fund Third Point, which has built a stake of more than $3.5 billion in the world's biggest food company.

Previously, Third Point has focused much of its recent activism in Japan, where investments have included Seven & I Holdings Co. and Sony Corp.

Loeb owns about 40 million shares and some options in Switzerland-based Nestle, according to an investor letter released Sunday after Bloomberg first reported the activist stake. The fund intends to encourage management to "pursue change with a greater sense of urgency" by selling Nestle's stake in L'Oreal SA, increasing leverage for share buybacks and reviewing its portfolio, among other suggestions.