USA | The Kraft Heinz Company announced that its Board of Directors has unanimously approved a plan to separate the Company into two independent, publicly traded companies through a tax-free spin-off.
The separation is designed to maximise Kraft Heinz’s capabilities and brands while reducing complexity, allowing both new companies to deploy resources toward their distinct strategic priorities more effectively. This focus will enable stronger performance while preserving the scale to compete and win in today’s environment.
The two resulting companies, whose names will be determined at a later date, will be:
- “Global Taste Elevation Co.” – a global leader in Taste Elevation and shelf-stable meals with approximately USD15.4 billion in 2024 net sales and approximately USD 4.0 billion in 2024 Adjusted EBITDA.
This company will include a roster of iconic brands and local jewels, with three billion-dollar brands – Heinz, Philadelphia and Kraft Mac & Cheese– with approximately 75 percent of net sales coming from sauces, spreads and seasonings.
Approximately 20 percent of 2024 net sales are in Emerging Markets, and approximately 20 percent are in Away From Home. This company will be well-positioned to drive industry-leading growth across attractive categories and geographies, leveraging a proven go-to-market model and the Brand Growth System to deliver scale and performance.
- “North American Grocery Co.” – a scaled portfolio of North American staples with approximately USD10.4 billion in 2024 net sales and approximately USD 2.3 billion in 2024 Adjusted EBITDA.
This company, which Carlos Abrams-Rivera will lead, will include a portfolio of beloved brands, including three billion-dollar brands – Oscar Mayer, Kraft Singles and Lunchables. Approximately 75 percent of net sales come from brands that are #1 or #2 in their respective categories.
This company is expected to generate reliable free cash flow through operational efficiency across stable growth categories and through the pursuit of growth opportunities for its brands in existing categories, adjacencies and Away From Home.
“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritise initiatives and drive scale in our most promising areas,” said Miguel Patricio, Executive Chair of the Board for Kraft Heinz.
“By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value. I look forward to working closely with Carlos and the Kraft Heinz team in the months ahead to prepare the organisation for the separation.”
The separation will provide both companies with more strategic and operational focus, enabling them to:
- Dedicate the right level of attention and resources to all areas of the business, allowing each respective brand portfolio to reach its full potential.
- Reduce operational complexity, driving further efficiencies and industry-leading margins.
- Customise capital allocation based on the strategic ambition of each company, accelerating performance and retaining financial flexibility.
- The companies are expected to have ample discretionary cash flow to invest in organic growth, return capital to shareholders and consider strategic transactions.
- In aggregate, the current dividend level is expected to be maintained. Management is targeting capital structures to maintain investment-grade ratings for both companies.
Carlos Abrams-Rivera will continue to serve as CEO of Kraft Heinz and will become CEO of “North American Grocery Co.” upon completion of the separation.
The Board has been working with a nationally recognised global executive search firm to identify potential CEO candidates for “Global Taste Elevation Co.” Kraft Heinz has no plans to change its current headquarters locations.
Kraft Heinz currently expects the transaction to close in the second half of 2026. Capital structure, and certain other matters for each business, such as board composition, company name and brand allocation, will be announced at a later date.
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