Kraft Heinz Nears Breakup Plan To Unlock Value

The Kraft Heinz Company

21.66 CHF 1.68%

• Charts
• News
• Analysen

Kaufen Verkaufen

(RTTNews) - Kraft Heinz Co. (KHC) is preparing to split itself into two separate businesses, according to a Wall Street Journal report citing people familiar with the matter.

The plan, which could be finalized and announced as early as next week, would divide the food giant into a grocery-focused company and a sauces-focused company.

The move follows months of strategic reviews. In July, Kraft Heinz confirmed it was exploring options for its grocery portfolio, including a possible spinoff of several iconic Kraft-branded products. That potential new entity could be valued at up to $20 billion, according to earlier reports. Executives said at the time they were working "with urgency" to evaluate alternatives.

By separating into two units, Kraft Heinz hopes to unlock greater value than its current market capitalization of about $33 billion. The sauces business would retain flagship brands such as Heinz ketchup and Grey Poupon mustard, while the grocery business would house much of the Kraft portfolio. However, the report cautioned that timing and details could still shift.

The company, created in 2015 through the merger of Kraft Foods and H.J. Heinz orchestrated by Berkshire Hathaway and 3G Capital, has been under pressure to reinvigorate growth. Berkshire Hathaway, led by Warren Buffett, exited Kraft Heinz's board in May.

The possible breakup comes after Kraft Heinz recently posted better-than-expected quarterly earnings, buoyed by steady U.S. demand for pantry staples and condiments. Shares rose about 2 percent in afternoon trading Friday following the report.

Kraft Heinz has not yet commented publicly on the speculation.