Kellogg announced Tuesday that it plans to separate into three independent public companies, sectioning off its iconic brands into distinct snacking, cereal, and plant-based companies.
Shares of the company rose 8 percent in premarket trading on the news.
Kellogg’s North American cereal business and plant-based division together accounted for about 20 percent of its revenue last year.
The remaining business includes its snacks, noodles, international cereals, and North American frozen breakfast brands, which altogether represented about 80% of its 2021 sales.
The company said it would also explore other strategic alternatives, including a potential sale, for its plant-based business beyond the planned spinoff.
Kellogg said it expects the tax-free spinoffs will be completed by the end of 2023.
Names for the new companies have not been decided yet, and proposed management teams for the two spinoffs will be announced at a later date.
Both the North American cereal company and the plant-based food spinoff will be located in Battle Creek, Michigan.
The global snacking company will keep its corporate headquarters in Chicago, with another campus in Battle Creek.
Cheez-It, Pop-Tarts and RXBAR are among the brands that will be housed under the global snacking company, which had $11.4 billion in sales last year.
About 10 percent of those sales come from its growing noodle business in Africa, while another 10 percent comes from Eggo waffles and the rest of its frozen breakfast business.
The spinoff offers investors another plant-based stock play besides Beyond Meat, which hasn’t turned a quarterly profit in nearly three years and has seen its shares tumble 63 percent this year.