Kraft Foods will split into two publicly traded companies, with one side focusing on snacks and the other on its grocery business, the company announced Thursday. “Our strategic actions have put us in a position to create two great companies, each with the leadership, resources and strong market positions to realize their full potential” CEO Irene Rosenfeld said in a statement. The company is planning a tax-free spinoff of its grocery business to shareholders, which includes Kraft cheese and Maxwell House coffee, as competitors such as Target and Wal-Mart expand their grocery sections. The split comes after Kraft's acquisition of the candy company Cadbury a year and a half ago and is slated to be complete by the end of next year. According to the Associated Press, Kraft's snack business, which includes Oreo cookies and Trident gum, has estimated revenues of $32 billion while its grocery business brings in an estimated $16 billion in revenue. "The new snacks company will combine units in Europe and the developing markets as well as the domestic snacks and confectionery business," reports The New York Times. " Annual revenue in the group is expected to stand at $32 billion, with three-quarters from international operations and 42 percent from emerging markets." In premarket trading, the food giant's shares rose 2.7 percent.
This article is from the archive of our partner The Wire.