Kraft Heinz splitting up, reversing decade-old megamerger

Published: Tuesday, September 2, 2025 at 11:04 am

Kraft Heinz to Split, Reversing Megamerger

Kraft Heinz is set to split into two independent, publicly traded companies, a decade after its landmark merger. The decision, approved unanimously by the board, marks a significant shift in strategy for the food giant. The split, expected to be completed through a tax-free spin-off, will create two distinct entities: Global Taste Elevation Co. and North American Grocery Co.

Global Taste Elevation Co. will house shelf-stable meals and iconic brands such as Heinz, Philadelphia cream cheese, and Kraft Mac & Cheese. North American Grocery Co. will include brands like Oscar Mayer, Kraft Singles, and Lunchables. The company is currently searching for a CEO for Global Taste Elevation Co.

The merger of Kraft and Heinz in 2015, orchestrated by Warren Buffett and 3G Capital, aimed to leverage the combined scale of the two companies. The deal, valued at $23 billion, was the most expensive in the food industry at the time. However, the combined company faced challenges, including shifting consumer preferences towards healthier options and increased competition from cheaper store brands.

Despite cost-cutting measures, including layoffs, and strategic moves like selling off certain businesses, Kraft Heinz struggled to maintain growth. The company's net revenue has declined annually since 2020. The separation is intended to allow each company to focus on its core strengths and drive growth. The separation is expected to close in the second half of 2026.

Carlos Abrams-Rivera will continue as CEO of Kraft Heinz and will become CEO of North American Grocery Co. once the separation is complete.

BNN's Perspective:

The split of Kraft Heinz reflects the dynamic nature of the food industry. While the initial merger aimed to create a powerhouse, changing consumer tastes and market pressures have made it difficult to maintain momentum. This move could allow each entity to be more agile and responsive to market trends. However, the success of the split will depend on effective leadership and strategic execution.

Keywords: Kraft Heinz, split, merger, Global Taste Elevation Co., North American Grocery Co., Heinz, Oscar Mayer, Kraft Mac & Cheese, Lunchables, Warren Buffett, 3G Capital, food industry, consumer trends, cost-cutting, revenue, CEO, tax-free spin-off

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