It only took about a year since the idea was first publicly floated, but Kraft Food’s (KFT) board of directors formally approved the spinoff of its North American grocery business last week. The tax-free spin is expected to be completed after the close on October 1st and shareholders of KFT will receive 1 share of the new Kraft Foods Group for every 3 shares of KFT owned. The new company will trade under the ticker ‘KRFT’ and post-spin, the parent company will be known as Mondelez International while trading under the ticker ‘MDLZ’.
Interestingly, shortly thereafter Nestle’s Chairman Peter Brabeck indicated that he had no plans to follow Kraft’s lead and split the company up. As the trend gains in popularity and success more and more companies will face questions regarding potentially breaking up, especially peers of spinoff companies.
For more information on Kraft’s upcoming split and its poor name choice, check out all of our articles on the subject here.
Disclosure: Author holds no position in any stock mentioned.