Kellogg Co K shares are trading higher Tuesday morning after the company announced plans to separate into three independent companies.
Kellogg's board has approved a plan to separate its North American cereal and plant-based foods businesses via tax-free spin-offs. The three new companies, whose names are yet to be determined, will consist of a "Global Snacking Co," a "North America Cereal Co" and a "Plant Co."
"These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities. In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth," said Steve Cahillane, chairman and CEO of Kellogg.
Kellogg aims to complete the spin-offs by the end of 2023. Shareowners are set to receive shares in the two spin-off entities on a pro-rata basis relative to their Kellogg holdings at the record date for each spin-off.
K Price Action: Kellogg has traded between $75.56 and $59.54 over a 52-week period.
The stock was up 7.18% at $72.39 at press time, according to data from Benzinga Pro.
Photo: Mike Mozart from Flickr.
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