Kraft Heinz has announced plans to divide into two separate publicly traded businesses, a decade after the merger that created the $45bn packaged food group. The split will be executed through a tax-free spin-off, aiming to simplify operations and improve financial performance following several years of declining sales.
One of the new companies will focus on sauces, spreads and seasonings, including Heinz, Philadelphia and Kraft Mac & Cheese, with projected annual sales exceeding $15bn based on 2024 figures. A chief executive is being sought for this unit.
The other company will concentrate on grocery staples such as Oscar Mayer meats, Lunchables and Kraft Singles processed cheese, generating annual sales of more than $10bn. This business will remain under the leadership of current Kraft Heinz chief executive, Carlos Abrams-Rivera.
The 2015 merger combined Heinz, founded in Pittsburgh in 1869, and Kraft, which began as a wholesale cheese business in Chicago in 1903. Kraft had previously spun off its snack division, now Mondelez International. Investor Warren Buffett and private equity firm 3G Capital backed the Kraft Heinz merger.
The breakup is scheduled for the second half of next year, following a trend of major US companies restructuring in recent years, including Kellogg, Warner Bros Discovery, Honeywell and General Electric.