Latest news with #grocery business
Fast Company
2 days ago
- Business
- Fast Company
Kraft Heinz could be splitting up in a deal worth nearly $20 billion
Kraft Heinz is studying a potential spin off 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, a source familiar with the matter said on Friday. However, the structure of the deal could change and there is no guarantee Kraft Heinz would move forward with any such deal, the source said. News of the potential move is the second effort this week by a storied U.S. company looking to shore up shareholder value as shoppers ditch their pricey products in an uncertain economy. Earlier this week, cereal maker WK Kellogg agreed to a $3.1 billion buyout deal from Italy's Ferrero. The Wall Street Journal first reported the development earlier in the day. According to the report, a split, which would leave the company with products such as its namesake Heinz ketchup and Dijon mustard brand Grey Poupon, could be finalized in the coming weeks. 'As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value,' a company spokesperson said. Its shares closed up 2.5%. The company currently has a market value of $31.33 billion. Kraft Heinz 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. But it has been a challenging investment for Berkshire. Inflationary pressures and a shift in focus toward fresher, less processed food have hurt demand for Kraft Heinz's lunch combos and other products. It lowered annual forecasts and reported a dour quarter in April, hurt by muted consumer spending. Kraft Heinz also said last month it would stop the launch of new products with artificial colors in the U.S. after Health Secretary Robert F. Kennedy Jr. outlined plans to remove synthetic food dyes from the U.S. food supply to address chronic diseases and conditions. 'KHC spinning off its grocery business echoes the 2023 Kellogg spinoff in which the company spun off its cereal business, which had been in volumetric decline for some time,' said Connor Rattigan, analyst at Consumer Edge. 'As CPGs (consumer packaged goods makers) contend with both changing consumer preferences and a challenging consumer environment, other CPGs may look to M&A and or similar corporate actions to improve their category exposures and improve their top-line trajectory,' Rattigan said.
Yahoo
3 days ago
- Business
- Yahoo
Kraft Heinz explores grocery business spinoff worth up to $20 billion, source says
(Reuters) -Kraft Heinz is studying a potential spin off 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, a source familiar with the matter said on Friday. However, the structure of the deal could change and there is no guarantee Kraft Heinz would move forward with any such deal, the source said. News of the potential move is the second effort this week by a storied U.S. company looking to shore up shareholder value as shoppers ditch their pricey products in an uncertain economy. Earlier this week, cereal maker WK Kellogg agreed to a $3.1 billion buyout deal from Italy's Ferrero. The Wall Street Journal first reported the development earlier in the day. According to the report, a split, which would leave the company with products such as its namesake Heinz ketchup and Dijon mustard brand Grey Poupon, could be finalized in the coming weeks. "As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value," a company spokesperson said. Its shares closed up 2.5%. The company currently has a market value of $31.33 billion. Kraft Heinz 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. But it has been a challenging investment for Berkshire. Inflationary pressures and a shift in focus toward fresher, less processed food have hurt demand for Kraft Heinz's lunch combos and other products. It lowered annual forecasts and reported a dour quarter in April, hurt by muted consumer spending. Kraft Heinz also said last month it would stop the launch of new products with artificial colors in the U.S. after Health Secretary Robert F. Kennedy Jr. outlined plans to remove synthetic food dyes from the U.S. food supply to address chronic diseases and conditions. "KHC spinning off its grocery business echoes the 2023 Kellogg spinoff in which the company spun off its cereal business, which had been in volumetric decline for some time," said Connor Rattigan, analyst at Consumer Edge. "As CPGs (consumer packaged goods makers) contend with both changing consumer preferences and a challenging consumer environment, other CPGs may look to M&A and or similar corporate actions to improve their category exposures and improve their top-line trajectory," Rattigan said.
Yahoo
4 days ago
- Business
- Yahoo
Kraft Heinz eyes breakup, WSJ reports
Kraft Heinz (KHC) is looking to spin off a significant part of its grocery business, according to a report from the Wall Street Journal. Market Domination Anchor Josh Lipton and Freedom Capital Markets chief global strategist Jay Woods discuss the news. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Our one key headline to get to Kraft Heinz is reportedly preparing to break itself up. This is according to the Wall Street Journal. Kraft Heinz may split its grocery business, including Kraft products, into a new entity valued up to $20 billion. The remaining company would focus on faster growing sauces and condiments like Heinz ketchup. A split could be finalized in the coming weeks, according to the report. Jay, what do you make of it? Yeah, um, we're going to be anticipating this one all weekend. We had the Kellogg's deal, when Kellogg split up into a serial business to, uh, just, uh, what was it, serial and then the candy bar business and the WLK brand got bought out this week. So it was shareholder value and right now, Kraft Heinz is 43% off its all-time high. They need to shake things up. The staples have been under pressure. So, uh, even if this doesn't come to fruition, this is something that they need to start thinking about, not just at Kraft Heinz, but at some of these other bigger brands. Anything to enhance shareholder value will be critical going forward. Yeah, the journal does remind us too, Jay, that Kraft Heinz said in May it was continuing to evaluate strategic transactions to unlock value and that it had said Buffet's Berkshire Hathaway would no longer hold board seats at the company and someone said, okay, maybe that was paving the way for some significant changes. So we shall watch and we shall see. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
