Kellogg It announced Tuesday that it plans to split into three independent public companies.
The company’s shares were up 8% in premarket trading on the news.
The company will separate from the North American grain trading division and the plant-based division, which accounted for about 20% of its revenue last year. The remaining business includes international snacks, pasta and cereals, and North American frozen breakfast brands, which collectively represented about 80% of their 2021 sales.
“All of these companies have great potential in their own right, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” CEO Steve Cahillan said in a statement.
The company said it will also explore other strategic alternatives, including the potential sale of its plant-based business, beyond its planned sub-offering.
Kellogg said it expects to complete the tax-exempt subsidiaries by the end of 2023. The names of the new companies have not yet been determined, and the proposed management teams for the two spin-offs will be announced at a later time. Cahillan will remain CEO of the company focused on global snacks.
The headquarters of the three companies will remain unchanged. Both the North American Grain Company and the plant-based food subsidiary will be based in Battle Creek, Michigan. The global snack company will maintain its headquarters in Chicago, with another campus in Battle Creek.
Cheez-It, Pop-Tarts and RXBAR are among the brands to be listed under the global snack company, which generated $11.4 billion in sales last year. About 10% of these sales come from the growing pasta business in Africa, while another 10% come from Eggo pies and the rest of the frozen breakfast business. North America will account for nearly half of the company’s revenue.
The plant-based Kellogg division reported sales of $340 million last year. The planned subsidiary will use its Morningstar Farms brand as its anchor.
Read the full press release here.
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