The Kraft Heinz Co.’s board of directors has unanimously approved a plan to separate the company into two independent, publicly traded companies through a tax-free spin-off designed to enable stronger performance while preserving the scale to compete in today’s environment.
The separation aims to maximize Kraft Heinz’s capabilities and brands while reducing complexity, allowing both new companies to more effectively deploy resources toward their distinct strategic priorities.
Kraft Heinz expects the transaction to close in the second half of 2026. The deal will follow the satisfaction of customary conditions, including final approval by Kraft’s board, receipt of a opinion with respect to the tax-free nature of the separation and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission.
The resulting companies, whose names will be determined at a later date, will be:
- “Global Taste Elevation Co.” – a global leader in shelf-stable meals with about $15.4 billion in 2024 net sales and about $4.0 billion in 2024 Adjusted EBITDA. This company will include a roster of well-known brands such as Heinz, Philadelphia and Kraft Mac & Cheese, with about 75 percent of net sales coming from sauces, spreads and seasonings. About 20 percent of 2024 net sales are in emerging markets and about 20 percent are in away-from-home.
- “North American Grocery Co.” – a scaled portfolio of North America staples with about $10.4 billion in 2024 net sales and about $2.3 billion in 2024 adjusted earnings before interest, taxes, depreciation and amortization. This company, which will be led by Carlos Abrams-Rivera, will include a portfolio of brands, including Oscar Mayer, Kraft Singles and Lunchables. About 75 percent of net sales come from brands that are No. 1 or No. 2 in their respective categories.
“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas,” said Miguel Patricio, executive chair of the company’s board.
“By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value. I look forward to working closely with Carlos and the Kraft Heinz team in the months ahead to prepare the organization for the separation.”
Following a thorough evaluation of potential strategic transactions, Kraft Heinz has determined that separating into two standalone companies – “Global Taste Elevation Co.” and “North American Grocery Co.” – offers the opportunity to unlock long-term value for all Kraft Heinz shareholders.
“The board’s unanimous decision to separate into two independent companies came after careful consideration and a comprehensive evaluation of our options. We strongly believe that increased focus will translate into better performance and value creation for shareholders,” said Jack Pope, lead director of the Kraft Heinz board.
Leadership and headquarters
Abrams-Rivera will continue to serve as CEO of Kraft Heinz and will become CEO of “North American Grocery Co.” upon completion of the separation.
The board has been working with a nationally recognized global executive search firm to identify potential CEO candidates for “Global Taste Elevation Co.” Kraft Heinz has no plans to change its headquarter locations in Chicago and Pittsburgh.
In connection with the strategic review and the board’s decision, Miguel Patricio, the current chair of the board, will become executive chair. Patricio will work closely with Abrams-Rivera to prepare the organization for the separation. Patricio has served as board chair since May 2022 and was the company’s CEO from June 2019-December 2023.
The board also has formed a separation committee, led by John Cahill, to oversee the execution of the proposed separation. Cahill has served as vice chair of the board since July 2015, prior to which he served as chairman and CEO of Kraft Foods Group Inc. from 2014-15 and Kraft’s executive chairman from 2012-14.
“We believe these changes will best position us to execute on our plan to separate into two independent, publicly traded companies,” Pope said. “Prior to the completion of the separation, our focus will continue to be on accelerating profitable growth and delivering shareholder value.”
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