BATTLE CREEK, MICH. — The breakup of Kellogg Co. into two businesses — to be named Kellanova and W.K. Kellogg — is taking shape with the transaction likely to take place late this year, said Steven A. Cahillane, chairman, president and chief executive officer.
Mr. Cahillane offered a rough timeline of the process in a May 4 earnings call with investment analysts. He described plans for W.K. Kellogg, the company’s heritage North American cereal business, to be spun off from Kellanova, the global snacking, international cereal and noodles, plant-based foods and North American frozen breakfast business.
“Everything is progressing well,” he said. “The announcement of new company names has been well received by stakeholders.
“The organizational design work is finishing up with leadership team members already announced and the remainder of talent placements coming later in the second quarter. The design and setup of systems and processes for W.K. Kellogg is underway and various post-spin transition services continued to be ironed out. Prior year carve-out financials are being prepared, and we expect to have them audited in the next couple of months.”
Mr. Cahillane said Kellogg plans to “test run” W.K. Kellogg functions on its own in the third quarter, including procurement, manufacturing, invoicing and financials. He said employee sentiment and engagement remain high.
An update in the form of a filing with the Securities and Exchange Commission announcing the registration of new stock, should be issued in late summer. The filing will be followed by an investor event late in the third quarter.
At the time, the company will share “strategies, capital structure and financial outlooks for both companies,” Mr. Cahillane. The actual spinoff is expected in the fourth quarter.
“Some of this is dependent on timing of regulatory and other customary approvals, but it should give you assurance that the information and transaction are not far away,” he said.The timeline appears consistent with Kellogg’s initial announcement in June 2022 in which it said the transaction would be completed during 2023.