Officials said the tax-free spinoffs will allow each of the three new companies to focus more on honing distinct market-based strategies, operate with more flexibility and improve "profitable growth." File Photo by Focke Strangmann/EPA
June 21 (UPI) -- Mega food producer Kellogg announced on Tuesday that it's spinning off into three new companies that will be responsible for its cereal, snacking and plant-based products.
The move is a serious shakeup for the 116-year-old company, which is known widely as Kellogg's.
The company said that its board approved the spinoffs into three independent companies and said each will be "better positioned to unlock their full standalone potential."
Kellogg's produces a number of popular cereals, including Raisin Bran and Rice Krispies. Its snacking products include Pringles and Cheez-Its and the new plant-based product company will be anchored by MorningStar Farms, which Kellogg's already owns.
None of the three companies have been officially named. All three sectors produced about $14 billion in net sales last year, Kellogg's said.
"After several years of transformation and improving results, the company believes it is the right time to separate these businesses so they may pursue their particular strategic priorities," Kellogg's said in a statement.
Officials said the tax-free spinoffs will allow each of the three new companies to focus more on honing distinct market-based strategies, operate with more flexibility and improve "profitable growth."
The move by Kellogg's follows recent similar trends among diverse companies. Last November, pharma giant Johnson & Johnson said that it would split into two companies -- one for its pharmaceutical and medical devices business and another for consumer products like Listerine and Neutrogena.
Toshiba also said last fall that it would split into three companies by 2023 to focus on infrastructure, devices and semiconductors.