Kellogg will separate its US, Canadian and Caribbean business into three independent companies of cereals, plant-based, and snacking in a bid to improve performance and maximise their standalone potential. Its Asia-Pacific region will remain “almost entirely intact”, the company said.
The three companies, temporarily named, are:
Global Snacking Co.: Will be valued at roughly $16.5 billion in net sales. It accounted for about about 80 per cent of net sales in 2021, and is focused on global snacking, international cereal and noodles, and North America frozen breakfast.
North America Cereal Co.: Valued at $3.5 billion in net sales. It will take in the US, Canada and the Caribbean with a portfolio of Kellogg’s well known cereal brands.
Plant Co.: Worth around $493 million in net sales. It will be a plant-based foods company anchored by the MorningStar Farms brand with strong potential for greater US market penetration and international expansion, the company said.
Kellogg’s three international regions – Europe, Latin America, and Asia-Pacific, Middle East, and Africa (AMEA) – will remain almost entirely intact within Global Snacking Co., the company said, with Steve Cahillane remaining chair and CEO of the company.
While Global Snacking Co. has an estimated EBITDA of around $3 billion, less than a quarter of net sales come from the three international divisions. Kellogg said keeping the international operations in Global Snacking would provide growth and scale opportunities for them.
Goldman Sachs is serving as lead financial advisor, along with Morgan Stanley & Co. LLC, and Kirkland & Ellis LLP is acting as legal advisor.
