Kraft Heinz to separate into two independent public companies

The Kraft Heinz (KHC) Company announced that its Board of Directors has unanimously approved a plan to separate the company into two independent, publicly traded companies through a tax-free spin-off. The separation is designed to maximize Kraft Heinz’s capabilities and brands while reducing complexity, allowing both new companies to more effectively deploy resources toward their distinct strategic priorities. This focus will enable stronger performance while preserving the scale to compete and win in today’s environment. The two resulting companies, whose names will be determined at a later date, will be: “Global Taste Elevation Co.” – a global leader in 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 will include a roster of iconic brands and local jewels, with three billion-dollar brands – Heinz, Philadelphia and Kraft Mac & Cheese – with approximately 75% of net sales coming from sauces, spreads and seasonings. Approximately 20% of 2024 net sales are in Emerging Markets and approximately 20% are in Away From Home. This company will be well positioned to drive industry-leading growth across attractive categories and geographies, leveraging a proven go-to-market model and the Brand Growth System to deliver scale and performance. “North American Grocery Co.” – a scaled portfolio of North America staples with approximately $10.4 billion in 2024 net sales and approximately $2.3 billion in 2024 Adjusted EBITDA. This company, which will be led by Carlos Abrams-Rivera, will include a portfolio of beloved brands, including three billion-dollar brands – Oscar Mayer, Kraft Singles and Lunchables. Approximately 75% of net sales come from brands that are #1 or #2 in their respective categories. This company is expected to generate reliable free cash flow through operational efficiency across stable growth categories and through the pursuit of growth opportunities for its brands in existing categories, adjacencies and Away From Home. The proposed separation is intended to be tax-free for Kraft Heinz and its shareholders. The company anticipates up to $300 million of dis-synergies, with clear opportunities to mitigate a substantial portion of these in the near term. Kraft Heinz currently expects the transaction to close in the second half of 2026. The transaction will follow the satisfaction of customary conditions, including final approval by the Kraft Heinz Board of Directors, receipt of a tax opinion with respect to the tax-free nature of the separation and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission. Capital structure, and certain other matters for each business, such as board composition, company name and brand allocation, will be announced at a later date.