A hotly anticipated break-up of Kraft Heinz is rumoured to be just days away, with the split potentially unlocking billions of dollars in value for shareholders.
The deal to spin off a huge chunk of its grocery business could be finalised and announced as soon as this week, according to the Wall Street Journal.
Consolidating largely Kraft products into one unit of up to $20bn, it would leave behind a sauce, condiment and spread specialist powered by key Heinz brands.
A deal has been eagerly anticipated since July. Kraft Heinz is said to estimate the two separate companies to be worth more than the group’s current $33bn market value.
The double-headed food giant was created in 2015, when Warren Buffett investment firm Berkshire Hathaway and Brazilian PE firm 3G capital oversaw a merger.
Kraft Heinz shares have fallen 68.3% since the merger, thanks in large part to a failed takeover of Unilever in 2017 that sent shares into a two-year freefall. Berkshire Hathaway has now swallowed $7.8bn in losses on its 27% stake in Kraft Heinz.
Despite a comfortable profit performance – it posted a net profit of $2.7bn in the year to 28 December 2024 – Kraft Heinz’s revenue has remained stuck around the $26bn mark since 2016. Revenue is forecast to slip by 1.5% to 3.5% in 2025.
Buffett “may now be hoping that a rumoured break-up of the Pittsburgh-headquartered food group will help to ease the pain”, said AJ Bell investment director Russ Mould.
“The demerger at Kellogg in 2023 unlocked some value and perhaps Kraft Heinz is looking to cook up something similar.”
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