Kraft Foods to split into two separate companies

A year and a half after the Cadbury acquisition, Kraft Foods will be split into two companies: a North American grocery business and an international snacks business.

“Detailed review by the board and management has shown that these two businesses would now benefit from being run independently of each other,” Kraft said on August 4.

Kraft plans to spin off the North American company to its shareholders. The split is expected to take 12 months, with the new companies in place by the end of 2012.

The new North American grocery business would include Kraft’s cheese, beverage and meals businesses with brands such as Philadelphia cheese, Oscar Mayer meats, Capri Sun beverages, Jell-O desserts and Maxwell House coffee and generate revenues of USD 16 million.

The snacks business would consist of its Kraft Foods Europe and Developing Markets units, as well as its snacks and confectionery divisions in North America. Of its projected annual revenue of around USD 32 billion, 75% would come from outside the US, 42% of which from emerging markets. Its brands would include Oreo and LU biscuits, Cadbury and Milka chocolates, Tang powdered drinks, Trident gum and Jacobs coffee.

Source: Kraft press release