The board of Kellogg Company has approved the company being split into two independent, publicly traded companies – Kellanova and WK Kellogg.
The separation will be completed on 2 October.
Kellogg announced the separation in March, saying the move would create two stronger, more focused companies.
Kellogg Company chair and CEO, Steve Cahillane, said, “After more than a year of comprehensive planning and execution, we are more confident than ever that the separation will produce two stronger companies and create substantial value for shareowners.”
Kellanova’s portfolio will be growth-orientated and weighted toward snacks and emerging markets. The company sees its highly differentiated brands as having a large opportunity for expansion.
Some of those include snacking brands Pringles, Cheez-It, Pop-Tarts, Kellogg’s Rice Krispies Treats, MorningStar Farms, Incogmeato, Gardenburger, Nutri-Grain, RXBAR, and Eggo; and cereal brands Kellogg’s, Frosties, Zucaritas, Special K, Krave, Miel Pops, Coco Pops, and Crunchy Nut.
“We are looking forward to a new era as Kellanova, marked by a more growth-oriented portfolio, a renewed vision and strategy, and an energized organization grounded by a winning culture and our founder's values,” Cahillane said.
It is projected to generate net sales of approximately US$13.4-$13.6 billion and adjusted-basis EBITDA of approximately US$2.25-$2.3 billion in 2024.
The goal for WK Kellogg Co is to modernise its supply chain to improve competitiveness, profitability, and cash flow.
WC Kellogg Co’s chair and CEO Gary Pilnick said the company had, “a 117-year legacy of innovation and the soul of a start-up”. Its portfolio includes the ‘Big 6’ – Frosted Flakes, Special K, Raisin Bran, Frosted Mini Wheats, and Rice Crispies.
It projects net sales of roughly US$2.7 billion and adjusted-basis EBITDA of around US$255-$265 million in 2024. It expects to improve its adjusted-basis EBITDA margins by 500 basis points by the end of 2026, through supply chain modernisation and a stable top-line trajectory.
“As a standalone company, we will benefit immediately from the executional advantages of increased focus and end-to-end integration, while we modernise our supply chain and substantially improve our profit margins,” Pilnick said.
Kellogg shareowners will receive 1 share of WK Kellogg Co for every 4 shares of Kellogg Company owned.
