Packaged food maker Kraft Heinz is reportedly preparing to break itself up, with plans to spin off a significant portion of its grocery business. The Wall Street Journal reported that this move could create a new company valued at up to $20 billion.
The potential breakup would essentially reverse much of the 2015 merger that created Kraft Heinz, which has seen its shares underperform over the past decade. The company is said to be considering retaining its higher-margin sauces and spreads division.
This strategic shift follows an ongoing evaluation of strategic transactions to unlock shareholder value, as announced in May. The move aims to address changing consumer tastes and a challenging market environment that has hampered results for the combined entity.
Warren Buffett, whose Berkshire Hathaway is Kraft Heinz's largest shareholder, has expressed disappointment in the planned split, stating he doesn't think taking the company apart will fix its problems. He also noted that the split would not be subject to a shareholder vote and would incur $300 million in additional overhead costs over the next year.
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