Kraft Heinz to Split into Two Companies to Boost Growth and Shareholder Value.

The Kraft Heinz Company plans to separate into two scaled, focused companies to accelerate profitable growth and unlock shareholder value. The two companies will have iconic brands, leading capabilities, attractive financial profiles, and unique value creation models. The separation will enable greater strategic and operational focus, maintain the current dividend level, and target capital structures to maintain investment-grade ratings. Miguel Patricio, current Chair of the Board, will serve as Executive Chair of the Board, and a Separation Committee has been established to oversee the separation.

The Kraft Heinz Company (KHC) has announced a significant strategic move to separate into two independent, publicly traded companies. This decision, unanimously approved by the Board of Directors, is aimed at maximizing the company's capabilities and brands while reducing operational complexity. The separation is expected to enable both entities to focus more effectively on their distinct strategic priorities, ultimately driving stronger performance.

The two resulting companies, yet to be named, will be "Global Taste Elevation Co." and "North American Grocery Co." The former will be a global leader in taste elevation and shelf-stable meals, with a portfolio of iconic brands such as Heinz, Philadelphia, and Kraft Mac & Cheese. The latter will be a scaled portfolio of North American staples, led by Carlos Abrams-Rivera, and will include brands like Oscar Mayer, Kraft Singles, and Lunchables.

The separation is expected to maintain the current dividend level and target capital structures to maintain investment-grade ratings for both companies. Miguel Patricio, the current Chair of the Board, will serve as Executive Chair of the Board, overseeing the separation process.

This strategic move is part of a broader effort to unlock shareholder value by increasing focus and reducing complexity. The separation will allow each company to allocate resources more effectively, prioritize initiatives, and drive scale in promising areas. Both companies are expected to generate ample discretionary cash flow for organic growth, shareholder returns, and potential strategic transactions.

The Kraft Heinz Company's 2024 reported sales were $25.85 billion, with a 3% decline from the previous year. The separation is seen as a way to address the challenges faced by the company in recent years, including a 63.2% slump in operating profit due to non-cash impairment losses.

The separation process will be overseen by a Separation Committee led by John Cahill, Vice Chair of the Board. The committee will work closely with Kraft Heinz's employees and stakeholders to ensure a smooth transition.

References:
[1] https://www.just-food.com/news/kraft-heinz-getting-close-to-split-announcement/
[2] https://seekingalpha.com/news/4490971-kraft-heinz-to-split-into-two-companies-to-drive-growth
[3] https://www.businesswire.com/news/home/20250902318952/en/The-Kraft-Heinz-Company-Announces-Plan-to-Separate-into-Two-Scaled-Focused-Companies-to-Accelerate-Profitable-Growth-and-Unlock-Shareholder-Value