The board of directors of Kellogg Company has approved the previously announced separation into two independent, publicly traded companies – Kellanova and WK Kellogg Co.
The separation, to be completed on 2 October 2023, will see the Kellogg Company renamed Kellanova.
It will continue to trade on the New York Stock Exchange (NYSE) under the ticker symbol 'K', while WK Kellogg Co is expected to begin trading on the NYSE under the ticker symbol 'KLG', the company noted.
Steve Cahillane, Kellogg Company's chair and chief executive officer, said, "After more than a year of comprehensive planning and execution, we are more confident than ever that the separation will produce two stronger companies and create substantial value for shareowners."
Kellogg shareowners of record, as of 21 September 2023, will receive one share of WK Kellogg Co (KLG) for every four shares of Kellogg Company (K) owned upon completion of the separation.
Kellanova
Kellanova, which will focus on snacks and emerging markets, is projected to generate net sales of approximately $13.4-$13.6 billion and adjusted-basis EBITDA of approximately $2.25 billion to $2.3 billion in 2024.
The business expects to deliver long-term annual growth rates of 3% to 5% for net sales (organic basis), 5% to 7% for operating profit (currency neutral and adjusted basis), and 7% to 9% for earnings per share (currency neutral and adjusted basis), including in 2024 on a like-for-like basis, excluding WK Kellogg Co.
Cahillane added, "We are looking forward to a new era as Kellanova, marked by a more growth-oriented portfolio, a renewed vision and strategy, and an energised organisation grounded by a winning culture and our founder's values."
WK Kellogg
The cereal business, WK Kellogg, which will be home to brands including Kellogg's and Froot Loops, is expected to post full-year net sales of $2.7 billion (€2.5 billion) and and adjusted-basis EBITDA of approximately $255-$265 million in 2024.
"WK Kellogg Co has a 117-year legacy of innovation and the soul of a start-up, with an organisation incredibly energised by our future," said Gary Pilnick, who will serve as WK Kellogg Co's chair and chief executive officer following the separation.
Pilnick added, "As a standalone company, we will benefit immediately from the executional advantages of increased focus and end-to-end integration, while we modernise our supply chain and substantially improve our profit margins. We're on a profitable journey to take this great business to the next level."
