Kraft Heinz to split into two independent companies

U.S.A – The Kraft Heinz Company has announced plans to separate into two publicly traded companies through a tax-free spin-off, aiming to sharpen strategic focus and unlock long-term shareholder value.

The company’s Board of Directors unanimously approved the move following a strategic review launched in May 2025. The separation is designed to streamline operations, enhance capital allocation, and maximize the performance of Kraft Heinz’s iconic brand portfolio.

The two new entities, with final names to be determined, will be formed around distinct strengths. 

Global Taste Elevation Co. will emerge as a US$15.4 billion business in 2024 net sales, anchored by billion-dollar brands Heinz, Philadelphia, and Kraft Mac & Cheese, with a focus on sauces, spreads, seasonings, and shelf-stable meals. 

North American Grocery Co. will generate US$10.4 billion in 2024 net sales and focus on household staples, including Oscar Mayer, Kraft Singles, and Lunchables, with current Kraft Heinz CEO Carlos Abrams-Rivera set to lead this division.

Both companies are expected to maintain investment-grade credit ratings, preserve the current aggregate dividend level, and generate strong discretionary cash flow to fund growth initiatives, shareholder returns, and potential acquisitions.

“By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand,” said Miguel Patricio, current Chair of the Board, who will serve as Executive Chair through the transition. “This will allow us to drive better performance and create long-term shareholder value.”

The proposed spin-off, expected to close in the second half of 2026, will be tax-free for shareholders and Kraft Heinz. The company estimates up to US$300 million in dis-synergies but plans to offset a significant portion through efficiency measures.

The strategic rationale centers on reducing operational complexity, enabling tailored capital allocation, and allowing each company to focus on distinct growth priorities. 

Global Taste Elevation Co. will leverage its global presence, emerging markets, and away-from-home channels for expansion. At the same time, North American Grocery Co. will emphasize operational efficiency and brand growth within stable, high-margin categories.

“Our 36,000 employees have made this transformation possible,” said Abrams-Rivera. “This next step will unleash the power of our brands and accelerate performance, while we continue to operate as one Kraft Heinz until the transaction is complete.”

Oversight of the separation will be led by a committee chaired by Vice Chair John Cahill. The Board is working with an executive search firm to identify a CEO for Global Taste Elevation Co. Kraft Heinz headquarters will remain in their current locations.

Jack Pope, Lead Director of the Board, emphasized that the decision followed a comprehensive review of strategic options. “After careful consideration, we believe increased focus will translate into better performance and value creation for shareholders,” he said.

The transaction is subject to customary approvals, including final Board consent, SEC filings, and a tax opinion confirming its tax-free status. Additional details regarding capital structure, board composition, and branding will be disclosed ahead of the planned closing in late 2026.

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