Kraft Heinz to split into two publicly traded companies

New Delhi: Kraft Heinz has announced plans to divide into two separate publicly traded businesses, reversing its strategy of offering a broad portfolio under one umbrella, as per the report.

The new entities, which have not yet been named, will focus on distinct areas. One will house faster-growing categories such as sauces, spreads and shelf-stable meals, including Heinz, Philadelphia and Kraft Mac and Cheese. The other will oversee grocery items and the food-away-from-home division, including Oscar Mayer, Kraft Singles and Lunchables.

“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritise initiatives and drive scale in our most promising areas,” said Miguel Patricio, executive chair of Kraft Heinz. 

“By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value.”

The company expects the separation to take effect in the second half of 2026.

The move will undo the 2015 merger orchestrated by Warren Buffett’s Berkshire Hathaway and investment firm 3G Capital, which created the third-largest food company in North America. While the merger initially cut costs, Kraft Heinz later struggled to retain value, facing declining sales and consumer shifts away from processed foods.

Shares in Kraft Heinz have fallen more than 68% since the merger was completed, with the business reporting its seventh consecutive quarterly sales decline in the most recent period.

Buffett told CNBC he was “disappointed” by the decision to split the business but said he would not oppose it. Berkshire Hathaway remains Kraft Heinz’s largest shareholder.

Kraft Heinz has been simplifying its portfolio in recent years, selling Planters and its US natural cheese business. In May, it said it was considering further strategic changes after Berkshire Hathaway representatives stepped down from the board, leaving the firm without a seat.