Kellogg’s Completes Corporate Split
As of this morning The Kellogg Company is no more. The global food giant completed its previously announced business split into two new separate entities: Kellanova, which will oversee snacks, meals, bars; and The W.K. Kellogg Company, which will house its North American cereal business.
W.K. Kellogg and Kellanova began trading on the New York Stock Exchange this morning, and as news of the split broke, share prices began to decline. Within an hour both Kellanova and W.K. Kellogg saw their share prices drop roughly 6.2% and 8.2%, respectively. At the time of press, Kellanova is trading at $51.88 per share, while W.K. Kellogg Co is at $13.74 per share.
Per terms of the split, for every four shares of common stock held in The Kellogg Company, shareholders received one share of W.K. Kellogg stock. Former Kellogg Company leader, and now Kellanova CEO and Chairman, Steve Cahillane, rang the NYSE Opening Bell this morning alongside other Kellanova execs.
The split has been in the works since June 2022, with the company pledging it would complete the restructuring by the end of Q4. Despite changing its corporate moniker all products sold between Kellanova and W.K. Kellogg Company will continue to carry the Kellogg’s brand name.
“With the completion of the separation, Kellanova has entered a new era with a new name and a new ambition,” said Cahillane, in a press release. “We are starting from a position of strength that is rooted in a century-old legacy as we embark on a journey to achieve our vision of becoming the world’s best performing snacks-led powerhouse.”
What do the new entities look like moving forward?
W.K. Kellogg Co and Kellanova teams will continue to work in the company’s existing Battle Creek, Michigan campus and corporate headquarters in Chicago. The company’s international businesses, which encompasses Europe, Latin America, and Asia Pacific, Middle East, and Africa, will be overseen by the Kellanova team and also continue to operate from their respective, current headquarters.
Kellanova brands include Pringles, Cheez-It, Pop-Tarts, Kellogg’s Rice Krispies Treats, MorningStar Farms, Incogmeato, Gardenburger, Nutri-Grain, RXBAR and Eggo, among others. This new business is expected to be a growth and innovation engine with Kellogg’s estimating it will notch $12.6 billion annual net sales this year.
W.K. Kellogg’s business is significantly smaller and expected to bring in $2.7 billion in net sales by the end of 2023. The cereal business encompasses brands such as Frosted Flakes, Froot Loops, Mini-Wheats, Special K, Raisin Bran, Rice Krispies, Corn Flakes, Kashi and Bear Naked. Gary Pilnick, Kellogg’s former chief legal officer, has taken on the role of W.K. Kellogg Company CEO and will oversee the company’s North America cereal portfolio.
“We would not have taken this step if we didn’t feel [W.K. Kellogg Co] would be better able to unlock its potential as a standalone company than if we were to maintain the status quo,” said Cahillane, in a video on the split. “It will have greater strategic focus and operational flexibility and will direct capital and resources toward unlocking growth, regaining category share and restoring and expanding profit margins.”
Note: This story has been updated.
