Kraft Foods to split in two
American grocery business to be spun off before the end of next year
Kraft Foods said on Thursday it will split its business in two and create separately listed companies each with several billion pounds worth of annual revenues.
The two operations will be a global snacks business and a North American grocery company, with the latter to be spun off to shareholders before of the end of next year.
Kraft, which owns the British chocolatier Cadbury, as well as Oreo cookies, Maxwell House coffee and the desert brand Jell-O, is the latest large-scale operator to announce break-up plans, after Sara Lee, Fortune Brands, ITT and ConocoPhillips recently did the same.
A Kraft North American grocery business would have revenues of close to $16 billion (£9.8 billion) and incorporate its US beverage, cheese and convenient meal elements.
A global snacks business would be worth almost $32 billion and cover confectionaries in North America, as well as all European and developing market operations.
Kraft’s deal to buy Cadbury in 2010 was unpopular with the British public and concerns were raised over the prospects for its UK employees. The company’s chairman and CEO recently failed to appear before a House of Commons committee investigating the takeover and the subsequent decisions taken by Kraft's management.
The company increased its full-year outlook on Thursday after posting higher-than-expected profits for its latest fiscal quarter.
Read also – Christian Doherty’s take on why businesses are increasingly deciding that ‘bigger is not always better’ – CFO World In Depth - Breaking up isn’t hard to do
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