Kellogg has announced that it will separate three different companies to create a “greater strategic, operational and financial focus” for each of the new companies to be named later.
According to plans announced on Tuesday, Kellogg will separate the North American cereal and vegetable food company – an estimated 20% of Kellogg’s net sales in 2021 – from global snack markets, cereal and noodle markets and frozen breakfast cereals. .
“Kellogg is well on the way to innovation to improve performance and increase long-term shareholder value,” said Steve Cahillane, chairman and chief executive officer of Kellogg Company, in a statement announced in the business plans. “It’s a change to our portfolio and today’s announcement is the next step in that change.”
“All of these companies have significant independent potential and a better focus will allow them to better focus their resources on different strategic priorities,” Cahillane continued. “Every company is expected to create added value for all stakeholders, and each is well placed to build a new era of innovation and growth.”
Kellogg expects the measures to be completed by 2023, and the headquarters of the three companies will focus on their global food, grain and crop markets. remain unchanged.
Kellogg said: “After several years of innovation and improving results, the company believes it is the right time to separate these companies so they can pursue their specific strategic priorities.”
Following the announcement, Kellogg rose more than 6% in pre-market trading on Tuesday.
The global snack business, which generated $ 11.4 billion in sales last year, is made up of well-known brands such as Pringles, Cheez-It, Pop-Tarts and Kellogg’s Rice Krispies Treats, Kellogg said. Last year, the company’s refreshments also came from some cereal brands, such as the frozen breakfast brand and the Eggo brand, the company added.
The grain company had sales of $ 2.4 billion last year from companies in the United States, Canada and the Caribbean, Kellogg said. The grain company sells brands such as Frosted Flakes, Froot Loops, Mini-Wheats and Special K.
The plant-based company, which will make $ 340 million by 2021, will expand the MorningStar Farms brand, which has many plant products such as chicken nuggets and sausages, according to Kellogg. .
The cereal trade and plant trade will remain based in Battle Creek, Michigan, Kellogg said. The global refreshment company will operate on two sites in Battle Creek and Chicago-based Chicago.