Higher costs offset spinoff benefits

Article Excerpt

Foodmaker Kellogg now plans to split into three separate firms. That will divides its mature cereal segment from the faster-growing, more trendy categories of snacks and plant-based foods. While the split should unlock value, rising costs for ingredients, packaging and shipping could offset those benefits. The re-opening of restaurants could also cut sales of stay-at-home foods, which jumped during COVID-19 lockdowns. KELLOGG COMPANY $74 is a hold. The company (New York symbol K; Manufacturing & Industry sector; Shares outstanding: 337.9 million; Market cap: $25.0 billion; Dividend yield: 3.1%; Takeover Target Rating: Medium; www.kelloggcompany.com) is a major maker of food products in North America and the rest of the world. Its well-known brands include Pringles, Special K, Pop-Tarts, Rice Krispies, Eggo, MorningStar Farms, and many more. Kellogg now plans to separate into three independent public companies through a tax-free spinoff of its North American (U.S., Canadian, and Caribbean) cereal business, as well as the spinoff its plant-based foods business. These two businesses account for 20% of Kellogg’s…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.