Food behemoth Kraft Heinz is planning to spin off a huge portion of its business, which includes Kraft products. That’s according to a new report published in The Wall Street Journal (WSJ). The new business could be valued at as high as $20bn (€17bn).
The split, which would leave the company comprised of sauces, condiments and spreads, could be finalised in a matter of weeks.
A source for the WSJ noted that the structure of the rumoured deal could change and there’s no guarantee Kraft Heinz would move forward with any such deal.
The original merger of the two American food giants, Kraft and Heinz was completed in 2015, when Warren Buffett’s Berkshire Hathaway and Brazilian private equity firm 3G Capital combined the former Kraft Foods with H J Heinz, but problems began to emerge just four years later (2019), when Kraft Heinz reduced the value of Kraft and Oscar Mayer meat products by $15bn.
Despite this, The Kraft Heinz Company remains hugely profitable, with a value of $31bn.
The rumours follow a pattern set by several multinationals, including Unilever which is offloading its ice cream business along with numerous other food brands. The Kellogg Company recently split in two and both Kellanova and WK Kellogg are being folded into larger portfolios (Mars, Inc. and Ferrero respectively).
The potential move comes just days after Kraft Heinz announced the sale of its Italian Baby and Specialty Food business to Italy’s NewPrinces Group.
Kraft Heinz tells us it does not comment on “rumours or speculation”, but reiterates May’s announcement that it has been evaluating “potential strategic transactions to unlock shareholder value”.
