By separating its North American cereal and plant-based foods businesses into three independent public companies, Kellogg is working toward transforming its portfolio to further enhance performance and value.
Kellogg Co. has unveiled a plan to separate its North American cereal and plant-based foods businesses, resulting in three independent public companies, each better positioned to unlock their full stand-alone potential.
Each of the three companies will have its own temporary name: Global Snacking Co., North America Cereal Co. and Plant Co. All three individual businesses are expected to be better positioned to execute with increased agility and operational flexibility, focus on their distinct strategic priorities, and realize improved outlooks for profitable growth.
“These businesses all have significant stand-alone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” said Steve Cahillane, chairman and CEO of Battle Creek, Mich.-based Kellogg. “In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth.”
The separation, which was approved by the company’s board of directors, is another way that the company is working toward transforming Kellogg’s portfolio to further enhance performance and value.
The proposed spin-offs are intended to result in tax-free distributions of North America Cereal Co. and Plant Co. shares to Kellogg Co. shareowners. Shareowners would receive shares in the two spin-off entities on a pro rata basis relative to their Kellogg holdings at the record date for each spin-off.
“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value,” added Cahillane. “This has included reshaping our portfolio, and [this] announcement is the next step in that transformation.”
In recent years, the company has transformed its portfolio into one that has expanded geographically and shifted toward growing businesses, particularly in snacking categories. The outcome of these strategic actions has been improved growth in recent years, with momentum sustained into 2022.
Global Snacking Co. is expected to be a leading company in global snacking, international cereal and noodles, and North America frozen breakfast, and have strong underlying growth momentum and profitability. North America Cereal Co. is projected to be a leading cereal company in the U.S., Canada and the Caribbean, with a portfolio of iconic, world-class brands and compelling opportunities for investment and profit growth. Plant Co., anchored by the MorningStar Farms brand, is anticipated to be a pure-play plant-based foods company, with a significant opportunity to capitalize on strong long-term category prospects by investing further in North American penetration and future international expansion.