Unleashing Our Potential

Kellogg is taking bold next steps on its portfolio transformation journey by announcing its plan to separate its North American cereal and plant-based foods businesses, resulting in three independent public companies, each better positioned to unlock their full standalone potential.

These actions will provide employees with new opportunities for growth and development, building on the K values and incredible corporate culture that exists at Kellogg Company today.

All three businesses have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities. Each is expected to create more value for all stakeholders and build a new era of innovation and growth.

Key Stats*

Global Snacking Co.

~$11.4 B

est. annual net sales

~$2 B

est. adj. EBITDA

North America Cereal Co.

~$2.4 B

est. annual net sales

~$250 M

est. adj. EBITDA

Plant Co.

~$340 M

est. annual net sales

~$50 M

est. adj. EBITDA

 

*All net sales and adjusted-basis EBITDA figures are based on the Company’s 2021 unaudited results derived from internal management reporting, further adjusted for splits by brands and markets, as well as preliminary cost and expense allocations, including corporate expenses; these figures will be refined prior to the transactions. Please refer to the reconciliations of adjusted-basis EBITDA, a non-GAAP financial measure, to reported operating profit in the press release about this announcement. 

Kellogg employee checking cereal boxes in a factory

What this portfolio transformation means for our employees

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FAQs

  • What is the strategic rationale for creating three independent companies?

    The spin-offs will better position each business to unlock its full potential by creating:

    • Global Snacking Co., a leading company in global snacking, international cereal and noodles, and North America frozen breakfast, consisting of approximately 80% of the company’s portfolio;
    • North America Cereal Co., a leading cereal company in the U.S., Canada, and Caribbean with a portfolio of iconic, category-leading brands; and
    • Plant Co., a leading, profitable, pure-play, plant-based foods company, anchored by the MorningStar Farms brand.

    As independent companies, all three businesses will be better positioned to:

    • Focus on their distinct strategic priorities, with financial targets that best fit their own markets and opportunities;
    • Execute with increased agility and operational flexibility, enabling more focused allocation of capital and resources in a manner consistent with those strategic priorities;
    • Realize improved outlooks for profitable growth; and
    • Shape distinctive corporate cultures and rewarding career paths for employees of each company, building on the K values and the incredible corporate culture that exists at Kellogg Company today.
  • Is Kellogg leaving Battle Creek? Where will the three businesses be located?
    • No. North America Cereal Co. and Plant Co. will both remain headquartered in Battle Creek, Michigan. Global Snacking Co. will maintain dual campuses in Battle Creek, Michigan and Chicago, Illinois, with its corporate headquarters located in Chicago.
    • We are leveraging our existing presence in Chicago and electing to make it Global Snacking Co.’s headquarters to enhance global connectivity. 
    • The transactions will not result in any office moves or closures, and no employees will be asked to relocate as a result of the changes.
  • How do spin-offs work? What other companies have done similar transactions?
    • Spin-offs involve a separation of a company's businesses through the creation of one or more independent, publicly traded companies.
    • In our case, that means we’re setting up North America Cereal Co. and Plant Co. as independent, publicly traded companies.
    • Immediately after the spin completions, shareowners of Kellogg Company stock will own shares of each of the three publicly traded companies.
    • Each company will be wholly separate and independent post-spins, and therefore no company will have any operational or management control or influence over another.
    • To ensure smooth separation execution, we expect there will be some ongoing arms-length arrangements between the companies, such as a transition services agreement (TSAs), supply agreements, and agreements to share certain intellectual property, such as brand names.
    • The spin-offs are currently targeted to be completed toward the end of 2023 to allow ample time for the technical mechanics of the spin as well as planning and structuring of the distinct entities.
      • Capital structures and dividends for each company will be determined before that time, as will management teams, board composition, and naming and branding.
    • The next steps of the process include preparing historical audited financial statements of the separate companies, determining how the businesses will be split, and designing how the new companies will operate.
    • Companies typically pursue a spin-off if they believe the businesses will benefit from operating separately versus as a single entity – whether that be to pursue unique growth strategies, investments or opportunities, or to unlock value. In the last two years, there have been approximately 100 spin-offs. Examples of recent transactions include Kraft Foods Inc.’s spin-off to form Kraft Foods Group, its North American Grocery business, and Mondelez, its global snack and confection business, and J&J’s spin-off of its consumer health division to focus on pharmaceuticals and medical devices.
  • Why has Kellogg made this decision now?
    • Over the years, Kellogg has transformed its portfolio to enhance performance and increase long-term shareowner value. This announcement is the next step in that transformation.
    • The Board of Directors and management have continually explored opportunities to capitalize on consumer and market trends to transform Kellogg’s portfolio and increase long-term shareowner value. Strategic actions to achieve this have included:
      • The acquisitions of Pringles (2012), Parati (2016), and RXBAR (2017), building Kellogg’s presence in the growing global snacking category;
      • The joint venture with Tolaram (2015), and Egypt expansion (2015), creating a significant African footprint and advancing the company’s emerging market presence which now represents 25% of net sales;
      • The exit from Direct Store Delivery (DSD) (2017) to reinvest in its snack brands; and
      • The divestiture of the Keebler business (2019) to focus the portfolio.
    • The successful execution of these actions has expanded Kellogg’s portfolio, resulting in a scaled global snacking business and significant emerging markets presence, complemented by strong and profitable breakfast and plant-based foods businesses.
    • The outcome of these strategic actions has been improved growth, with momentum sustained into 2022.
    • After several years of transformation and improving results, the Company believes it is the right time to separate the businesses, so they may pursue their differentiated strategic priorities.
    • As independent companies, all three businesses will be better positioned to:
      • Focus on their distinct strategic priorities, with financial targets that best fit their own markets and opportunities;
      • Execute with increased agility and operational flexibility, enabling more focused allocation of capital and resources in a manner consistent with those strategic priorities;
      • Realize improved outlooks for profitable growth; and
      • Shape distinctive corporate cultures and rewarding career paths for employees of each company, building on the K values and the incredible corporate culture that exists at Kellogg Company today.
    • Shareowners will now be able to value each company based on its distinct operational and financial characteristics and invest accordingly.