Packaged food giant the Kraft Heinz Company announced on Tuesday that its board of directors has unanimously approved a plan to split into two separate, publicly traded companies.
The proposed split will essentially reverse a merger between the companies from 2015, which has not provided favorable long-term results.
Shares of Kraft Heinz (NYSE:KHC) were down more than 4% in early trading on Tuesday after the announcement. The stock is down 13% year to date and more than 25% over the last 12 months.
What will the breakup look like?
The names of the two separate companies have yet to be decided.
The first company, referred to in the news release as “Global Taste Elevation Co.,” will primarily feature shelf-stable meals. It will include brands like Heinz, Kraft Mac & Cheese, and Philadelphia.
The second company, referred to in the news release as “North American Grocery Co.,” will feature a scaled portfolio of North American staples. It will include brands like Kraft Singles, Lunchables, and Oscar Mayer.
The proposed separation is intended to be tax-free, with the transaction expected to close in the second half of 2026.
According to Kraft Heinz, the split is intended 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.”
“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,” said Miguel Patricio, executive chair of the Kraft Heinz board, in a statement.
A question-and-answer session is scheduled for today, Tuesday, September 2, 2025.
Mega-merged companies are thinking smaller
The proposed split follows a recent trend in which larger companies are splitting into two smaller entities, sometimes undoing the size and scale they’d achieved by merging in the first place.
In 2023, The Kellogg Company’s board of directors approved a plan to split into two separate entities: Kellanova, which would focus on snack foods, and WK Kellogg Co, which would primarily focus on cereals. The separation was finalized in October 2023.
Unilever, meanwhile, announced plans in 2024 to spin off its ice cream division as a separate company. The Magnum Ice Cream Company, which will operate as a stand-alone business featuring brands such as Ben & Jerry’s, Magnum, and Wall’s, is expected to go public during the last quarter of 2025.
And just last week, Keurig Dr Pepper announced its ultimate plans to split into two separate companies. It will acquire JDE Peet’s, then operate as two businesses—one focused on coffee and another on other beverages, such as sodas and energy drinks.
