Kellogg Company, the maker of Frosted Flakes, Rice Krispies and Eggo, will split into three companies focused on cereals, snacks and plant-based foods.
Kellogg’s, which also owns MorningStar Farms, the plant-based food maker, said the spin-off of the yet-to-be-named cereal and plant-based food companies should be completed by the end of next year.
Kellogg’s had net sales of 14.2 billion dollars (£11.6 billion) in 2021, with 11.4 billion dollars (£9.3 billion) generated by its snack division.
Cereal accounted for another 2.4 billion dollars (£1.96 billion) in sales last year while plant-based sales totalled around 340 million dollars (£277 million).
“These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” said chief executive Steve Cahillane.
Shareholders will receive shares in the two spin-offs on a pro-rata basis relative to their Kellogg holdings.
The company’s corporate headquarters will move from Battle Creek, Michigan, to Chicago, but it will maintain dual headquarters in both cities for its snack company, which makes up about 80% of current sales.
Kellogg’s three international headquarters in Europe, Latin America, and AMEA will remain in their current locations.
Companies have begun to split up at an accelerated pace, including General Electric, IBM and Johnson & Johnson, but such splits are more rare for food producers.
The last major split in the sector was in 2012, when Kraft split to create Mondelez.
Shares of Kellogg Company jumped 8% to 73.29 dollars before the opening bell on Tuesday.
