Kraft Heinz to Break Apart After Struggling Merger

Kraft Heinz will separate into two separate companies, undoing much of the $46 billion tie-up brokered by Warren Buffett’s Berkshire Hathaway and 3G Capital in 2015. The breakup reflects nearly a decade of weak sales, heavy write-downs, and a share price that has slid about 60% since the merger closed.

One of the new firms will focus on global brands such as Heinz, Philadelphia and Kraft mac and cheese, generating $15.4 billion in 2024 net sales, with sauces, spreads and seasonings accounting for roughly three-quarters of revenue. 

The second entity will consolidate North American grocery staples including Oscar Mayer, Kraft singles and Lunchables, with projected net sales of $10.4 billion this year. The separation is slated to close in the second half of 2026.

What Does This Mean for Me?

The split is the culmination of years of difficulties for Kraft Heinz. In 2019, the company disclosed an SEC subpoena tied to accounting issues, slashed its dividend by 36%, and wrote down $15.4 billion in value from Kraft and Oscar Mayer. 

Further impairments followed for brands like Maxwell House and Velveeta, while divestitures included the $3.2 billion sale of most of its cheese business to Lactalis and the $3.35 billion sale of Planters to Hormel. Despite efforts to revive growth through investments in Lunchables and Capri Sun, results failed to meet expectations.