The Kraft Heinz Company is separating into two independent companies, a decade after the $50 billion merger between Kraft Foods Group and H.J. Heinz formed the world’s fifth largest food and beverage company. The transaction is expected to close in the second half of 2026.
In a week for the international food and beverage industry that has already included the news that Keurig Dr Pepper will be acquiring JDE Peet’s for $28 billion and then splitting into two companies, Kraft Heinz is also aiming to improve its focus by separating brands – “allowing each respective brand portfolio to reach its full potential”, according to the company statement.
In Australia, Kraft Heinz spans a range of brands including Heinz, Golden Circle, Bull’s-Eye, Plant Proteinz and the set acquired from Suntory-owned Cerebos Food & Instant Coffee business in 2017 – such as Fountain, Gravox, and Saxa.
The transaction will follow the satisfaction of customary conditions, including final approval by the Kraft Heinz board, receipt of a tax opinion with respect to the tax-free nature of the separation, and effectiveness of appropriate filings with the US Securities and Exchange Commission.
Kraft Heinz executive chair of the board, Miguel Patricio, said the company’s brands are iconic and beloved, but the complexity of its current structure makes it challenging to allocate capital effectively, prioritise initiatives and drive scale in promising areas.
“By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value,” said Patricio.
“I look forward to working closely with Carlos and the Kraft Heinz team in the months ahead to prepare the organization for the separation.”
Share value dropped 7 per cent following the announcement, but is already on the road to recovery.
The two resulting companies, whose names will be determined at a later date, are described as:
- Global Taste Elevation Co. – a global leader in Taste Elevation and shelf-stable meals with approximately 75 per cent of net sales coming from sauces, spreads and seasonings. This company will include a roster of iconic brands and local jewels, with three billion-dollar brands – Heinz, Philadelphia, and Kraft Mac & Cheese.
- North American Grocery Co. – a scaled portfolio of North America staples, including three billion-dollar brands – Oscar Mayer, Kraft Singles, and Lunchables. Approximately 75 per cent of net sales come from brands that are first or second in their respective categories.
Kraft Heinz CEO, Carlos Abrams-Rivera, will take on leadership of North American Grocery Co.
“This move will unleash the power of our brands and unlock the potential of our business,” said Abrams-Rivera.
“This next step in our transformation is only possible because of the commitment of our 36,000 talented employees who deliver quality and value for consumers every day. We will continue to operate as ‘one Kraft Heinz’ throughout the separation process.”
The board has been working with a global executive search firm to identify potential CEO candidates for Global Taste Elevation Co.
