Enlarge image
Kellogg's product corn flakes
Photo: SAUL LOEB / AFP
The cornflakes giant Kellogg's wants to split into three companies.
On the one hand, the stagnating North American business with cornflakes, rice krispies and other breakfast cereals is to be spun off, on the other hand, the business with vegetarian and vegan meat substitutes, which together make up around 20 percent of group sales, like Kellogg's on Tuesday in Battle Creek in the US state of Michigan informed.
In the future, the group wants to focus on the global business with snacks such as Pringles chips and Nutri Grain bars, as well as on the breakfast cereal business outside of the USA, Canada and the Caribbean, which promises higher growth rates.
The split is the next step in the restructuring of the group, which began years ago with numerous brand and product acquisitions, said Kellogg's boss Steve Cahillane.
"Each of these companies is designed to create more value for all stakeholders, and each is well positioned to shape a new era of innovation and growth."
share price rises
The European business will be almost entirely part of the future core business, which will operate under the working title "Global Snacking Co." and which Cahillane intends to continue.
The company will grow faster than Kellogg's today.
Of the 11.4 billion dollars in sales that this part of the company recently generated, almost 50 percent continue to come from the USA, but ten percent also come from Africa, where Kellogg's is successfully selling noodles.
The business with cornflakes, froot loops and rice krispies in North America, where Kellogg's has sales of 2.4 billion dollars, ends up in the "North America Cereal Co.", but which is hardly growing and has significantly lower profit margins.
The first priority here will be to stabilize sales and improve margins.
The "Plant Co.", which has a turnover of around 340 million dollars with vegetarian and vegan frozen products, primarily under the "MorningStar Farms" brand, is to be spun off by the end of 2023, like the North American business.
The Kellogg's shareholders would then receive additional shares from both companies in their custody accounts.
However, Cahillane does not rule out that the division will be sold beforehand instead.
Kellogg's shareholders like the plan.
The paper gained seven percent before the start of trading on the stock exchange.
beb/Reuters