Kellogg to be divided into three independent companies

Kellogg announced on Tuesday that it plans to split into three independent public companies.

The company’s shares rose 8% in pre-market news trading.

The company will separate its North American cereals business and plant-based division, which accounts for about 20 percent of its revenue last year. The rest of the business includes brands of snacks, noodles, international cereals and North American frozen breakfast, which together account for about 80% of its sales in 2021.

“All of these companies have significant stand-alone potential, and the improved focus will allow them to better focus their resources on their individual strategic priorities,” CEO Steve Cahilon said in a statement.

The company said it would explore other strategic alternatives, including potential sales, for its factory business, beyond the planned spin-off.

Kellogg said it expects tax-free taxation to be completed by the end of 2023. The names of the new companies have not yet been decided, and the proposed management teams for the two divisions will be announced at a later date. Cahillane will remain CEO of the company, which focuses on global snacks.

The headquarters of the three businesses will remain unchanged. Both the North American Cereal Company and the Spinof Plant Plant will be located in Battle Creek, Michigan. The global snack company will maintain its corporate headquarters in Chicago, with another campus in Battle Creek.

Cheez-It, Pop-Tarts and RXBAR are among the brands that will be housed under the global snack company, which had sales of 11.4 billion dollars last year. About 10% of these sales come from the growing noodle business in Africa, while another 10% come from Eggo waffles and the rest of the frozen breakfast business. North America will account for almost half of the company’s revenue.

Kellogg’s plant division reported $ 340 million in sales last year. The planned spinoff will use the Morningstar Farms brand as its anchor.

Read the full press release here.

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