Kraft Heinz confirms spin-off into two separate companies

02 Sep 2025 | By Louis Gore Langton

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The Kraft Heinz Company plans to separate into two independent, publicly traded businesses by the second half of 2026, following unanimous approval from its board of directors.

The move, structured as a tax-free spin-off, is designed to give each company a sharper focus, reduce complexity, and “unlock long-term shareholder value,” according to the company.

Miguel Patricio, executive chair of the board, says the new structure will enable clearer capital allocation and operational 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,” he says.

Kraft Heinz CEO Carlos Abrams-Rivera adds that the shift represents the next step in the company’s ongoing transformation.

“This move will unleash the power of our brands and unlock the potential of our business. This next step in our transformation is only possible because of the commitment of our 36,000 employees who deliver quality and value for consumers every day,” he says.

Two focused companies

The separation will create:

Global Taste Elevation Co. – A business with about US$15.4 billion in 2024 net sales and US$4 billion in adjusted EBITDA. Its portfolio will include Heinz, Philadelphia, and Kraft Mac & Cheese, with roughly three-quarters of sales from sauces, spreads, and seasonings. Around 20% of sales will come from emerging markets, and another 20% from foodservice.
North American Grocery Co. – A business with about US$10.4 billion in 2024 net sales and US$2.3 billion in adjusted EBITDA. It will house brands including Oscar Mayer, Kraft Singles, and Lunchables, with about 75% of sales from category leaders. Carlos Abrams-Rivera will serve as CEO of this company after the separation.

Jack Pope, lead director of the Kraft Heinz board, emphasizes that the decision followed a comprehensive strategic review. “The board’s unanimous decision to separate into two independent companies came after careful consideration and a comprehensive evaluation of our options. We believe that increased focus will translate into better performance and value creation for shareholders,” he says.

Next steps

Patricio will continue as executive chair and work with Abrams-Rivera to oversee the separation process. The board has also formed a separation committee led by John Cahill to supervise execution. A search is underway for the CEO of Global Taste Elevation Co.

Kraft Heinz expects up to US$300 million in dis-synergies from the transaction but plans to mitigate much of this in the near term. Both companies are expected to retain investment-grade ratings, maintain financial flexibility, and keep dividend levels consistent with the current structure.

The company currently does not plan to change its headquarters locations. Final details on capital structures, company names, and board composition will be released ahead of closing.

Kraft Heinz will host a live Q&A session with analysts today to discuss the transaction.

Kraft Heinz was formed in 2015 through the merger of Kraft Foods Group and H.J. Heinz Company. The deal was orchestrated by 3G Capital and Berkshire Hathaway, which jointly owned Heinz at the time and helped finance the US$49 billion transaction. The merger created the fifth-largest F&B company in the world at that time.