PITTSBURGH – Kraft Heinz Co. today said it was halting its planned split into two companies, a breakup announced last fall as necessary to split off underperforming parts of the business and spur growth.
Steve Cahillane, who took over as chief executive officer on January 1, described today’s decision as temporary, saying a halt would give management time to concentrate on improving profitability.
“Since joining the company, I have seen that the opportunity is larger than expected and that many of our challenges are fixable and within our control,” Cahillane said in a press release. “As a result, we believe it is prudent to pause work related to the separation.”
Kraft Heinz will invest $600 million in marketing, research and development, Cahillane said, as it focuses on improving products and reducing some prices.
The announcement came as the food and beverage giant reported disappointing fourth-quarter and fiscal 2025 financial results. Kraft Heinz said organic revenue dropped 4.2% in the fourth quarter, a bigger decline than analysts were anticipating. For the full fiscal 2025, organic net sales declined 3.4%. Adjusted gross profit margin declined 120 basis points to 33.5%.
The split announced in September called for separating growth brands such as Heinz ketchup, Philadelphia cream cheese and Kraft Mac & Cheese from its grocery and foodservice portfolio that includes, Oscar Mayer hot dogs, Lunchables and Maxwell House coffee.
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Executives were expecting the deal to close in the second half of this year, essentially undoing Kraft Heinz’s $46 billion mega-merger from a decade ago. Cahillane is a former Kellanova chief executive who presided over the split of Kellogg into two publicly traded companies, both of which were subsequently sold to private investors.
“Kraft Heinz is already seeing the benefit of Steve’s deep industry experience and proven track record of building brands and leading large-scale transformations,” Kraft Heinz chairman John Cahill said today in a statement. “From day one, he has brought a fresh, consumer-first perspective that we believe creates a clear glide path back to profitable growth. We are confident that our decision to pause the work related to the separation and fully focusing our resources in service of growth is the right move at this time.”
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