(Reuters) -Kraft Heinz is closing in on a plan to break itself up, the Wall Street Journal reported on Friday, citing people familiar with the matter. The transaction, aimed to split the company into two separate units focusing on grocery and sauces, respectively, could be finalized and announced as early as next week, the report […]
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Kraft Heinz nears deal to break up, WSJ reports
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(Reuters) -Kraft Heinz is closing in on a plan to break itself up, the Wall Street Journal reported on Friday, citing people familiar with the matter.
The transaction, aimed to split the company into two separate units focusing on grocery and sauces, respectively, could be finalized and announced as early as next week, the report said.
In July, the company was studying a potential spinoff of a large chunk of its grocery business, including many Kraft products, into a new entity that could be valued at as much as $20 billion on its own. Later that month, it said that it was “working with urgency” to evaluate strategic options for some of its brands.
Kraft Heinz is betting that two separate units would worth, in total, more than the company’s roughly $33 billion market value, the report added, noting that plans and timing could still change at the last minute.
The split would leave the company with products such as its namesake Heinz ketchup and Dijon mustard brand Grey Poupon, according to the Journal.
Kraft Heinz did not immediately respond to a Reuters request for comment.
The company was formed in 2015 after Warren Buffett’s Berkshire Hathaway and Brazilian private equity firm 3G Capital combined the former Kraft Foods with H.J. Heinz, which they bought in 2013. Berkshire Hathaway left Kraft’s board in May.
The Heinz ketchup maker, in late July, reported a quarterly results beat, helped by resilient demand for its pantry staples and condiments in the United States.
Shares of the company were up 2% in afternoon trading.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Alan Barona)