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Breakfast cereal manufacturer Kellogg is spinning off its North American breakfast cereal business and its plant-based division into independent, publicly traded companies.
Two spin-offs
Cornflakes giant Kellogg is divesting two of its divisions. All (breakfast) cereal activities in North America will be housed in a head office in Michigan. The plant-based products division, which currently consists mainly of the Morningstar Farms brand, will also be separated. Kellogg is considering selling the vegetable spin-off over time, but for now the new company still shares its Michigan headquarters with the North American division.
“These businesses all have significant standalone potential, and a stronger focus will allow them to better focus their resources on their various strategic priorities,” CEO Steve Cahillane said, according to CNBC. Names for the new companies have not yet been announced. What is certain is that they will go public.
Snack division takes lead
The remaining company mainly comprises the international activities of the FMCG producer. This mainly concerns all breakfast cereals outside the United States, but this company will also house the ‘leftovers’. Kellogg also has some snack brands, such as Cheez-It, Pop-Tarts and RXBAR, a frozen breakfast division in North America (including Eggo waffles) and growing noodle sales in Africa.
The international snacking business is clearly becoming the leader of the trio, as those activities together accounted for some 80% of all sales. CEO Cahillane will therefore remain the ceo of this company, which will have its own headquarters in Chicago. A campus will remain in Michigan. Kellogg expects the demerger to be completed by the end of 2023.
