BY GRACE AIRHULE
Kellogg, an American multinational food manufacturing company, is splitting into three independent public companies focused on cereals, snacks and plant-based foods, the company announced on Tuesday.
The move, coming a decade after Kellogg purchased Pringles for $2.7 billion, is aimed at simplifying its structure and sharpening its focus on the snack business.
Kellogg is the latest legacy company to opt for a breakup. Johnson & Johnson, General Electric and Toshiba had made similar announcements late last year.
Kellogg has not named the new companies, but it said the process should be completed by the end of 2023.
Steve Cahillane, Kellogg CEO, said the businesses all have significant standalone potential, and an enhanced focus would enable them to better direct their resources toward their distinct strategic priorities.
“In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth,” Cahillane said in a statement.
Kellogg, which derives 80 percent of its revenue from international snacks, noodles, frozen breakfasts and other foods, last year generated more than $14 billion in sales.
The company’s board of directors has signed off on the plan. Once the companies are broken up, existing shareholders will be given pieces of the cereal and plant-based food entities based on the proportion of their Kellogg holdings.