Food maker Kellogg announced on Monday that the company would split into three separate entities in an attempt to maximize its performance on the market. The announcement was followed by a Kellogg stock (K) surge and a six percent gain.
The first entity will be focused on cereal production and will keep operating under the name Kellog. The second company will take over the snack side of the business, while the third will continue the plant-based mission of the vegan/vegetarian brand MorningStar Farms. The names of the latter two companies have not been disclosed.
“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value,” Kellogg CEO Steve Cahillane said in a press release. “These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities.”
The split is expected to be completed at some point in 2023 after being approved by the board of directors. All three companies will operate from the Battle Creek, Michigan headquarters.
Shortly after Kellogg announced the move, the company’s stock soared from $67.53 per share to $71.00. This marked the K’s highest value in more than a month.