USA: Kraft Heinz to separate into two businesses

US food giant Kraft Heinz has announced it will split into two independent, publicly traded companies in a tax-free spin-off.

In a statement, the company said the move was designed to streamline operations, sharpen focus and unlock new growth opportunities.

The first of the two separate companies will be a $15.4 billion business known as Global Taste Elevation Co, with a brand portfolio encompassing Heinz, Philadelphia, and Kraft Mac & Cheese. The company will have 75% of its revenue in sauces, spreads, and seasonings and look to build on strong growth in emerging markets.

The second company, North American Grocery Co, will be a $10.4 billion revenue business focused on North American staples such as Oscar Mayer, Kraft Singles and Lunchables. With most of its brand portfolio holding top spots in their respective categories, this division will reportedly focus on cash flow, efficiency and steady growth.

Current Kraft Heinz CEO Carlos Abrams-Rivera, who will lead the new North American Grocery Co business, said: “This move will unleash the power of our brands and unlock the potential of our business. This next step in our transformation is only possible because of the commitment of our 36,000 talented employees who deliver quality and value for consumers every day”.

“We will continue to operate as ‘one Kraft Heinz’ throughout the separation process”, he added.

Source: Kraft Heinz