Kraft Heinz is weighing up splitting the group into two separate companies as the US food giant continues to struggle with shifting consumer tastes.
One option on the table for the group is a separation of the groceries part of its portfolio, containing the ready meals and processes cheese products, from the more lucrative sauces and condiments operation, including the Heinz brand.
The potential move comes a decade after Warren Buffett and 3G Capital merged Heinz and Kraft, and it follows an announcement in May that the group was considering a number of options to turn around its performance.
Executives at Kraft Heinz expect splitting the group up will create two companies worth more than the current group market value of $31bn, according to reports in The Wall Street Journal, which first covered the story.
A split could be finalised within the coming weeks but the board has yet to make a final decision, according to people involved in the discussions. There is a still a possibility assets will be sold off instead, with the group remaining as one entity.
“As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value,” the company told The Financial Times. “Beyond that, we do not comment on rumours or speculation.”
Kraft Heinz’s history as a combined group has been rocky since the 2015 mega-merger, with a hostile $143bn takeover attempt fought off by Unilever in 2017.
Buffett also admitted to overpaying for Kraft in 2019, with his Berkshire Hathaway firm taking a $3bn writedown on its investment.
Berkshire originally teamed up with 3G Capital in 2013 to take Heinz private in a $28bn deal before taking control of Kraft two years later in a deal worth more than $60bn.
Berkshire still owned 27.5% of Kraft Heinz stock at the end of March, according to regulatory filings.
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