The Kraft Heinz Company announced plans to separate into two independent, publicly traded companies through a tax-free spin-off. This separation will enable each business to allocate resources more effectively, reduce operational complexity, and pursue strategic priorities with greater focus.
The two planned companies will include:
- Global Taste Elevation Co., which will focus on taste elevation and shelf-stable meals, with approximately $15.4 billion in 2024 net sales and approximately $4.0 billion in 2024 adjusted EBITDA. This company’s brands include Heinz, Philadelphia, and Kraft Mac & Cheese, with about 75% of net sales coming from sauces, spreads, and seasonings.
- North American Grocery Co., which will focus on North American staples, with approximately $10.4 billion in 2024 net sales and approximately $2.3 billion in 2024 adjusted EBITDA. This company’s brands include Oscar Mayer, Kraft Singles, and Lunchables, with approximately 75% of sales from brands ranked #1 or #2 in their categories.
The proposed separation is intended to be tax-free for Kraft Heinz and its shareholders. The company anticipates the transaction will close in the second half of 2026, subject to customary conditions, including final board approval and regulatory clearance.
In a recent quote, Miguel Patricio, Executive Chair of the Board for Kraft Heinz, said, “Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas. 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.”
