US foods group Kellogg is to split into three public companies by spinning off its North American cereal and its plant-based food businesses, which together account for about a fifth of its sales.
The proposed spin-offs will distribute shares to Kellogg investors in the cereal company, which will generate about $2.4bn in net sales, and the plant-based group. Shares will be given out pro-rata relative to investors’ stakes in the parent company.
The global food brand said on Tuesday that it expected the North American cereal branch to be split off first and was aiming to complete both transactions by the end of next year.
The plant-based group, which generates about $340mn in sales, will be anchored by the MorningStar Farms brand.
The remaining 80 per cent trunk of the Michigan-based food group, which generated about $11.4bn in 2021 net sales, focuses on snacking, international cereal and noodles, as well as frozen breakfast products in North America. Nearly 60 per cent of net sales are from global snacks, such as Pringles, Pop-Tarts and Cheez-It.
The global snacking business “is expected to be a higher-growth company than today’s Kellogg Company”, the group said in a statement on Tuesday.
North America will represent less than half of its net sales, with emerging markets bringing in around 30 per cent and developed international markets another 20 per cent.
“These businesses all have significant standalone potential,” said Steve Cahillane, Kellogg’s chief executive and chair.