The Clap
Food manufacturing giant Kellogg (NYSE: K) will be separating into three publicly traded companies.
The Deets
Each company will focus on either snacks, cereals, or plant-based products. Kellogg also hinted at a possible sale of its plant-based business.
The spin-offs are expected to be complete by end of 2023, & names for the new companies haven’t been decided on yet.
The Rationale
Kellogg sees potential for standalone profits from each of the three businesses. The company argues that a spin-off would further allow each business to recover from recent supply chain disruptions & recapture lost market share.
Why this matters
The snacks business has been the most successful for Kellogg in recent years. Its flagship cereal business has actually stagnated, at least in the U.S.
Investors reacted positively to the news, with Kellogg shares jumping as high as 8% in yesterday’s trading.
