U.S. food group Kellogg will spin off its North American grain and plant-based food businesses into three publicly traded companies, which together account for about a fifth of its sales.
The proposed spinoff would distribute shares to Kellogg investors and the plant-based group in the grain company, which would generate about $2.4 billion in net sales. Shares will be prorated based on the investor’s stake in the parent company.
The global food brand said on Tuesday that it expects the North American cereals unit to be split first, with plans to close both deals by the end of next year.
The plant-based group, which has sales of about $340 million, will be under the Morningstar Farms brand.
The Michigan-based food group will have net sales of about $11.4 billion in 2021, with the remaining 80% of its business focused on North American snacks, international cereals and noodles, and frozen breakfast products. Nearly 60% of net sales come from global snacks such as Pringles, Pop-Tarts and Cheez-It.
The group said in a statement on Tuesday that the global snack business is “expected to be a faster-growing company than Kellogg’s is today.”
North America will account for less than half of its net sales, emerging markets around 30% and developed international markets 20%.
“These businesses all have enormous standalone potential,” said Kellogg’s chief executive and chairman Steve Kahiran.