Kellogg to separate cereal, plant-based food businesses
After an approved plan by its board of directors was passed, Kellogg made the formal announcement that its North American cereal and plant-based food businesses will be spun off into two separate entities.
The tax-free spin-offs will result in three independent companies, which will be named at a later date, including:
- Global Snacking: A global snacking, international cereal and noodles company that will include North American frozen breakfast;
- North America Cereal: A cereal company in the United States, Canada and the Caribbean that will include a portfolio of iconic and world-class brands; and
- Plant: A pure-play plant-based foods company that will be anchored by the MorningStar Farms brand and focus on capitalizing on strong long-term category prospects.
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“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value,” said Steve Cahillane, Kellogg’s chairman and CEO. “This has included reshaping our portfolio, and today’s announcement is the next step in that transformation.”
As independent companies, all three businesses will be better positioned to focus on their distinct strategic priorities, with financial targets that best fit their own markets and opportunities; execute with increased agility and operational flexibility, enabling more focused allocation of capital and resources in a manner consistent with those strategic priorities; realize improved outlooks for profitable growth; and shape distinctive corporate cultures, rooted in Kellogg’s strong values, the company said.
“These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” Cahillane said. “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.”
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Kellogg’s three international regions — Europe, Latin America, and Asia Pacific, Middle East, and Africa (AMEA) — will remain almost entirely intact within Global Snacking. Steve Cahillane will remain chairman and CEO of Global Snacking, the company said.
The proposed management team for North America Cereal and Plant will be announced at a later date.
North America Cereal and Plant will both remain headquartered in Battle Creek, Mich. Global Snacking will maintain dual campuses in Battle Creek and Chicago, with its corporate headquarters located in Chicago. Kellogg’s three international regions’ headquarters in Europe, Latin America and AMEA will remain in their current locations.