Kellogg will split into 3 companies: Breakfast, Cereals and Plant; Board approved the plan

US-based food company Kellogg’s on Tuesday said its board has approved a plan to split the company into three units. The new companies, whose names will be determined later, will focus separately on snacking, cereals and plants, according to a company statement.

“We expect North America to be before the grain spin-off plant, both of which are currently targeted for completion by the end of 2023,” the company said in the statement.

It said the purpose of the proposed spin-off is a tax-free distribution of North America Grain Company and Plant Company shares to Kellogg Company’s shareholders. Shareholders will receive shares in the two spin-off entities on a proportionate basis relative to their Kellogg holdings at the record date for each spin-off.

Kellogg said the snacking business with net sales of approximately $11.4 billion will be a leader in global snacking, international cereals and noodles and frozen snacks across North America with iconic, world-class brands and strong underlying growth momentum and profitability.

“This business is expected to be a higher-growth company than today’s Kellogg Company, with a more growth-oriented portfolio and more focused resources and focus on brand building, innovation, and international expansion of world-class brands and creation.” is aided to scale in emerging markets,” the statement said.

It added that the snacks business is expected to drive increased operating leverage, revenue growth management, productivity and profit margins through increasing scale of emerging markets.

With net sales of approximately $2.4 billion, the cereal business will be a leading cereal company in the US, Canada and the Caribbean, with prestigious, world-class brands and attractive opportunities for investment and profit growth.

“In the near term, North America Cereals Company will be focused on the restoration of inventory, profit margins and share positions following 2021 supply disruptions. In the long run, it will focus resources and strengthen the business by increasing its portfolio, operational capabilities and productivity,” it added.

The business is expected to generate stable net sales over time, which will lead to improved profit margins, leading to profit growth, higher cash flow and return on invested capital, the company said.

The plant business with approximately $340 million in net sales will be a leading, profitable, pure-play plant-based food company anchored by the Morningstar Farms brand, a significant opportunity to capitalize on strong long-term category potential by investing in Will happen. Further penetration into North America and future international expansion.

“As an independent business, the Plant Company is focused on growth and profitability by building awareness and penetration in North America, and expanding internationally in the future, focusing its resources and investments to capitalize on the strong category potential.” The company said that from the portfolio-segment assumptions already stated, the business is expected to accelerate net sales growth over time.
Location of Headquarters

In the statement, Kellogg’s said the cereal and plant companies will be headquartered in Battle Creek, Michigan, while its snacking company will maintain dual campuses in Battle Creek and Chicago, Illinois, with its corporate headquarters located in Chicago.

The Kellogg Company’s three international regions headquartered in Europe, Latin America and AMEA (Asia, Middle East and Africa) will remain at their current locations.

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