Consumer staples giant Kraft Heinz Company (KHC) announced that its Board of Directors has approved a plan to split the company into two independent, publicly traded companies through a tax-free spin-off. The move would reverse much of the $46 billion 2015 merger that was the brainchild of Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) and private equity firm 3G Capital.
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The transaction is expected to close in the second half of 2026. The news of the split comes as more food giants are pursuing separations or divestitures, exiting slower-growth categories in an attempt to revive their businesses.
In August, Keurig Dr Pepper (KDP) announced that it would undo the 2018 deal that merged a coffee company with the 7 Up owner. Keurig Dr Pepper plans to separate after it closes the recently announced $18 billion acquisition of Dutch coffee company JDE Peet’s (JDE).
More on Kraft Heinz’s Split into Two Businesses
Kraft Heinz stated that it would split the company into two separate businesses, with one global entity focusing on sauces, spreads, and seasonings, while the other would sell grocery staples in North America. Through this move, KHC aims to create businesses that are more focused and less complex.
The company added that CEO Carlos Abrams-Rivera will lead the $10 billion North America grocery business, which will include brands such as Oscar Mayer, Kraft Singles, and Lunchables. Meanwhile, the other business, which will have roughly $15 billion in annual sales, will focus globally on “taste elevation,” with brands like Heinz ketchup, Philadelphia cream cheese, and Kraft Mac & Cheese. KHC added that it will appoint a global executive search firm to identify potential CEO candidates for the “Global Taste Elevation Co.”
Kraft Heinz has been struggling in recent years due to weak demand for some of its core products, including Lunchables, Capri Sun, macaroni and cheese, and mayonnaise. The company has been focusing on reshuffling its portfolio and investing in healthier products.
It is worth noting that Kraft Heinz recently slipped into a net loss of $7.82 billion for Q2 2025 from a profit of $100 million in the prior-year quarter. The Q2 loss resulted from a $9.3 billion non-cash impairment charge, which the company attributed mainly to a sustained decline in its stock price and market capitalization.
Is KHC a Buy, Sell, or Hold?
Currently, Wall Street has a Hold consensus rating on Kraft Heinz stock based on 13 Holds and two Sell recommendations. The average KHC stock price target of $28.64 indicates 2.4% upside potential. KHC stock is down 9.3% year-to-date.
