"The complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas,"
"By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand."
"Questions remain around the true growth and margin potential for both new companies,"
"long-term weaker consumption trends."
Kraft Heinz plans a tax-free spinoff to split into two public companies. One company will house Heinz ketchup, iconic condiments and fast-growing global brands with $15.4 billion in annual sales. The other company will contain slower-growing grocery products such as Oscar Mayer and Lunchables, which generate $10.4 billion in revenue. The split aims to enable clearer capital allocation, focused resources and independent strategies for each portfolio. Shares fell as much as 5.5% and are down about 14% year-to-date. Analysts expressed uncertainty due to shifting consumer preferences away from processed foods and questioned long-term growth and margin potential. The move follows similar breakups by other food and drink companies, including Kellogg.
Read at Los Angeles Times
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