Kraft spinoff splits food giant in two
Kraft spinoff of its global snack operation will mean that brands including Oreo and Nabisco will be under a new label called Mondelez International Inc. The North American grocery division will carry the Kraft name after the Kraft spinoff and include Velveeta, Miracle Whip and Oscar Mayer.
Tim Cofer, head of Mondelez Europe, poses with products in this undated handout photo made available on October 1, 2012. Mondelez International Inc. ranks as the world's biggest chocolate, candy and biscuit maker after the Kraft spinoff. Mondelez, whose stable of brands includes Cadbury and Milka chocolate, was launched on Tuesday after a demerger from Kraft's North American grocery business, still called Kraft.
Handout/Reuters/File
New York
Kraft Foods Group and Mondelez International are now trading as two separate public companies.
Kraft Foods Inc. decided to spin off its global snack business in March. That company, called Mondelez International Inc., will be home to global brands including Oreo, Cadbury and Nabisco and trade under the ticker "MDLZ."
Mondelez's stock gained 2 cents to $27.84 in Tuesday morning trading.
The North American grocery business will continue to carry the name Kraft and include Velveeta, Miracle Whip and Oscar Mayer. Its ticker will change to "KRFT" from "KFT"
Shares of Kraft Foods Group, based in Northfield, Ill., added 61 cents to $44.71.
Scott Mushkin of Jefferies started coverage of Kraft Foods Group Inc. with a "Buy" rating and $50 price target. The analyst said while the company only runs in the slower growing North American market, it is a shareholder-friendly operator with strong brands.
"Management's strong track record in the consumer products space gives us confidence that it can execute on the ambitious plans for Kraft," Mushkin wrote in a client note.
Citi Investment Research's David Driscoll gave Kraft Foods Group a "Neutral" rating and $48 price target. The analyst feels thatKraft can increase its sales by 2 percent to 3 percent and boost earnings per share by 7 percent to 9 percent over the long term by improving margins and reinvesting savings into new products and marketing.