Kraft Foods Inc. said it plans to split into two publicly traded companies, with one focusing on its international snack brands like Trident gum and Oreo cookies and the other on its North American groceries business that includes Maxwell House coffee and Oscar Mayer meats.
The surprise move, announced Thursday, comes after Kraft last year became the second largest global food company with its acquisition of Cadbury PLC.
Its proposed global snacks business will include Kraft’s European business and developing markets units, as well as snacks and confectionery businesses in North America. With about $32 billion in estimated revenue, it will house the likes of Oreo cookies, Cadbury chocolates and Trident gum, all which have greater prospects for growth in emerging markets and to sell more to consumers on the go.
Kraft also reported earnings Thursday. For the second quarter, Kraft reported a profit of $976 million, or 55 cents a share, up from $937 million, or 53 cents a share, a year earlier. Operating earnings rose to 62 cents, driven by currency and operating gains, while net revenue climbed 13% to $13.9 billion, helped by price increases. Analysts polled by Thomson Reuters were looking for 58 cents and $13.2 billion, respectively.
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Kraft Foods plans to split