Who needs the Dow Jones Industrial Average anyways? Shortly after parent company Kraft Foods (KFT) got the boot from the DJIA, it was announced that post spinoff, the Kraft Foods Group (the North American Grocery spinoff) will become a member of the S&P 500. Kraft will replace coal producer Alpha Natural Resource (ANR) which just happens to be one of the worst performing stocks of the year. So much for loyalty. The parent company, which will be known as Mondelez International post-spin, will remain in the S&P 100 and 500. Instead of forced selling, could this move actually lead to forced buying as S&P Index funds pick up shares of the company? It will be interesting to watch the action post spin.
For more reading on the upcoming Kraft –> Kraft Foods Group/Mondelez International spinoff check out all of our earlier coverage here. Since this is such a well known company, there has been a ton of ink spilled on the subject. Here are a few pieces to look at for more information:
2) Another overview/positive take at Seeking Alpha
3) Yet another positive one
4) Why not also include a less excited take on the transaction
As a reminder, the 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 grocery company will trade under the ticker ‘KRFT’ and post-spin, Mondelez International will trade under the ticker ‘MDLZ’.
Disclosure: Author holds no position in any stock mentioned.
(H/T alert reader John)