According to reports in the Wall Street Journal, Kraft Heinz is weighing up the possibility of creating a new entity for its grocery products business that could be valued at as much as $20 billion.
This would leave Kraft Heinz to focus on the Heinz sauces and condiments portfolio.
The outlet also said that a split could be finalised in the coming weeks. However, Reuters has reported that no decision has yet been made, while the structure of any possible new business is subject to change.
When approached for a comment, a Kraft Heinz spokesperson said: “As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value. Beyond that, we do not comment on rumours or speculation.”
In May of this year, Kraft Heinz announced that it had been has been exploring potential “strategic transactions” as part of a wider effort to “drive profitable long-term growth and value creation”.
No further detail was disclosed at the time, but Kraft Heinz did agree to the sale of its Italian baby and specialty food business to NewPrinces Group earlier this month.
Kraft Heinz was formed in 2015 after Berkshire Hathaway and Brazilian private equity firm 3G Capital combined the Kraft Foods with H.J. Heinz.
Speaking to Food Manufacture about the situation at Kraft Heinz earlier this year, food sector analyst and director at Wilkin Chapman Rollits, Julian Wild, said that the firm was hoping to sell off “non-strategic businesses” and “looking to buy into areas where they would like to be more prominent, for example, healthier products, playing to the weight-loss market”.
“There is clearly shareholder pressure to move these plans along quicker but it is a bit like turning round a super tanker,” Wild added.
This news follows the announcement that Italian food firm Ferrero has entered into an agreement to acquire WK Kellogg for $3.1 billion.
WK Kellogg was created in 2023 as a standalone North American cereal business following the split of the Kellogg company into three separate entities.
