(New York) The American breakfast champion is about to split: Kellogg announced on Tuesday that it would split its operations into three separate companies, each with a public listing.
Updated yesterday at 09:18.
The new structure will include a group handling international sales of snack foods, cereals and instant noodles, and frozen breakfasts in North America, a company focused on cereal sales in the United States, Canada and the Caribbean, and finally an entity specialized in the sale of products of plant origin.
The new companies will be “Global Snacking Co.”, “North America Ceral Co.” or “Plant Co.” are called, Kellogg said, noting that these are temporary names.
The internationally oriented company’s activities accounted for more than 80% of the group’s sales ($11.4 billion) last year, those of the North American division around 17% ($2.4 billion), while meat alternatives accounted for less than 3% of Kellogg’s sales, or $340 million.
Kellogg is targeting to complete the spin-off of North America Ceral Co. and Plant Co. from the main group in late 2023, subject to US regulatory approvals.
The group, known for its corn flakes, frosties, honey pops and Special K cereals, said the companies would retain their headquarters.
The North American cereal distribution company and plant products distribution company will be located in Battle Creek, Michigan. The global company will be headquartered in Chicago, Illinois with a campus in Battle Creek.
Shares of Kellogg, which is listed on the New York Stock Exchange, were up about 6% at the time of the announcement in electronic trading ahead of Wall Street’s opening. The stock ended the day up 1.95% at $68.86.
Each of the new entities “has significant potential independently, and improved focus will allow them to better align their resources with their specific strategic priorities,” Kellogg CEO Steve Cahillane said in a statement.
The goal of each company will be to create added value for all stakeholders, and each is well positioned to create a new era of innovation and growth.
Steve Cahillane, CEO of Kellogg
An iconic brand serving millions of homes, the history of Kellogg dates back to 1894 when American industrialist WK Kellogg founded the corn flakes business before opening the Battle Creek Toasted Corn Flake Company in 1906, later renamed the Kellogg Company became.
The agri-food giant, which is based in 180 countries, produces Pringles potato chips, Cheez-It cheese crackers, pastries filled with pop tarts and Eggo frozen waffles in addition to its famous cereals.
It also owns plant-based brands, including MorningStar Farms, Gardenburger, and Kashi.
Revenue in 2021 was $14.2 billion and annual profit was $1.8 billion.
Other large US companies have announced their separation in recent months. This was the case last November for the conglomerate General Electric and the pharmaceutical company Johnson & Johnson.