Kraft Heinz Co., one of Pittsburgh’s most high-profile corporate anchors, is preparing to split into two publicly traded companies in a move that raises key questions for Pittsburgh’s workforce and business community.
The Kraft Heinz Board of Directors unanimously approved a plan to separate the company into two independent, publicly traded companies through a tax-free spin-off, the company said Tuesday.
“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives, and drive scale in our most promising areas,” said Miguel Patricio, executive chair of the board for Kraft Heinz.
Expected to close in the second half of 2026, the plan will create two distinct entities. The first is Global Taste Elevation Co., projected at $15.4 billion in 2024 net sales, will be built around Heinz, Philadelphia, and Kraft Mac & Cheese brands. Its focus will be international growth in sauces, spreads, and seasonings.
“This company will be well positioned to drive industry-leading growth across attractive categories and geographies, leveraging a proven go-to-market model and the Brand Growth System to deliver scale and performance,” said Kraft Heinz.
The second is North American Grocery Co., with $10.4 billion in projected 2024 sales, will be anchored by Oscar Mayer, Kraft Singles, and Lunchables brands. Current Kraft Heinz CEO Carlos Abrams-Rivera will lead this company.
Kraft Heinz said that this company is expected to generate reliable free cash flow through operational efficiency across stable growth categories and through the pursuit of growth opportunities for its brands in existing categories, adjacencies and Away From Home.
“By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value,” Patricio said.
Specifically, the separation will provide both companies with more strategic and operational focus, enabling them to dedicate the right level of attention and resources to all areas of the business, allowing each respective brand portfolio to reach its full potential, he added.
It also will reduce operational complexity, driving further efficiencies and industry-leading margins, and customize capital allocation based on the strategic ambition of each company, accelerating performance and retaining financial flexibility, said Patricio.
Jack Pope, lead director of the Kraft Heinz Board of Directors, said the board’s unanimous decision to split followed careful consideration and a comprehensive evaluation of options.
“We strongly believe that increased focus will translate into better performance and value creation for shareholders,” he said.
At the same time, executives at Kraft Heinz — which maintains dual headquarters in Pittsburgh and Chicago — said Sept. 2 that there are no plans to change headquarters locations.
However, the way in which resources and executive functions will be divided between the two new companies is still being worked out, according to company leaders.
“This move will unleash the power of our brands and unlock the potential of our business,” said Kraft Heinz CEO Carlos Abrams-Rivera. “This next step in our transformation is only possible because of the commitment of our 36,000 talented employees who deliver quality and value for consumers every day.”
The company estimates as much as $300 million in “dis-synergies” from the separation, but thinks those costs can largely be offset.
Both spin-offs will aim for investment-grade credit ratings and are expected to maintain Kraft Heinz’s current dividend level in aggregate.
For Pittsburgh, the outcome will hinge on where decision-making authority and investment dollars land once the split is complete.
The separation process will be overseen by a newly formed board committee, with final details on leadership, corporate structure, and brand allocations expected over the next two years.
For now, both headquarters — including Pittsburgh — will continue to operate as part of a unified Kraft Heinz.
“We will continue to operate as ‘one Kraft Heinz’ throughout the separation process,” said Abrams-Rivera, who will continue to serve as CEO of Kraft Heinz before leading North American Grocery Co.
The board is working with a global executive search firm to identify potential CEO candidates for Global Taste Elevation Co.
The board also has formed a Separation Committee, led by current Vice Chair of the Board John Cahill, to oversee the execution of the proposed separation. Cahill has served in his current position since July 2015, prior to which he served as chairman and CEO of Kraft Foods Group Inc. from 2014 to 2015 and as Kraft’s executive chairman from 2012 to 2014.
“We believe these changes will best position us to execute on our plan to separate,” said Pope. “Prior to the completion of the separation, our focus will continue to be on accelerating profitable growth and delivering shareholder value.”
Kraft Heinz currently expects the transaction to close in the second half of 2026. The transaction will follow the satisfaction of customary conditions, including final approval by the Kraft Heinz Board of Directors, receipt of a tax opinion with respect to the tax-free nature of the separation, and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission.
Capital structure, and certain other matters for each business, such as board composition, company name and brand allocation, will be announced at a later date, the company said.