Kraft Heinz to Separate Into Two Publicly Traded Companies

Kraft Heinz Co. said Tuesday it plans to split into two separate companies, undoing a mega-deal ushered in a decade ago that turned the maker of Kraft Mac & Cheese into one of the largest packaged food sellers in the world.

Following the breakup, one company will be made up of its Heinz Ketchup and other iconic condiments and boxed meals — a unit that currently generates $15.4 billion in sales. The second firm will include the slower-growing grocery products such as Oscar Mayer hot dogs and Lunchables, which currently generate revenue of $10.4 billion.

The company had foreshadowed this move, and its shares were little changed following the announcement. The stock was down about 21% in the 12 months through Friday’s close.

The aim is to siphon off lagging grocery staples into a new entity, allowing its faster-moving products more room to run and management to better focus on growing each side of the business. The company said the split will occur through a tax-free spinoff, and the companies’ names will be determined later.

“The complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas,” said Miguel Patricio, Kraft’s current chairman. “By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand.”

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