Kraft Mac & Cheese and Heinz Ketchup.
Natalie Rice | CNBC
Craft Heinz It split into two companies and reversed many of its hugely hit $46 billion mergers for 10 years, creating one of the world’s largest food companies.
The first of the two new companies, which have not yet been named, mainly includes shelf stable meals, and include brands such as Heinz, Philadelphia, Craft Mac and Cheese. Kraft Heinz said the company itself had $15.4 billion in net sales in 2024, with about 75% of these sales coming from sauces, spreads and seasonings.
Kraft Heinz said the second new company is a “scaled portfolio of Staples in North America” and includes items such as Oscar Mayer, Craft Singles and Lantable. The company will earn approximately $10.4 billion in net sales in 2024.
“Kraftheinz’s brand is iconic and beloved, but the complexity of the current structure makes it challenging the promotion scale in the most promising areas possible” “By separating it into two companies, you can allocate the right levels of attention and resources to unlock the potential of each brand and promote better performance and creation of long-term shareholder value.”
The deal that created Kraft Heinz in 2015 was the brainchild of Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital. Investors were originally supporting the merger, but the gloss began to fade as the combined company’s US sales declined.
Then came the disclosure in February 2019 that Kraftheinz had received a subpoena from the Securities and Exchange Commission related to accounting policy and internal controls. The company also cut its dividends by 36% and scored $15.4 billion writes on its two biggest brands, Kraft and Oscar Mayer. A few days later, Buffett told CNBC that Berkshire Hathaway had overpaid for the craft.
More writings followed for leadership shakeups and iconic brands, including Maxwell House and Velveeta. Kraft Heinz also began selling some of its business and selling most of its cheese units to the nuts division, including French dairy giant Lactalis and the Planters brand. Home.
In the recent quarter, the company has invested in a rise in several brands, including Lankanable and Caprisan. Despite turnaround efforts, Kraft Heinz’s shares have slipped around 60% since the merger ended in 2015.
This split comes as larger food companies are selling from the slow growth category and pursuing a breakup that will impress investors once again.
August, Keurig Dr Pepper It has announced that it will cancel the 2018 deal, which merged the coffee company with the owner of 7 UP. Keurig Dr Pepper is set to separate after closing its $18 billion acquisition of Dutch coffee company Jde Peet’s. And two years ago, Kellogg spun the snack business into Keranova and renamed it WK Kellogg.
– CNBC’s Michele Luhn contributed to this report.
