Kellogg’s, (K) the iconic American company that built a global brand has officially split into two. Kellogg’s cereal business began trading as a standalone called WK Kellogg Co. and its share price at the New York Stock Exchange was $13.80 per share. It has the ticker KLG while the parent company is now called Kellanova and is trading under Kellogg’s ticker K. Kellanova consists of its snacking division and North American frozen-food unit.
The Kellogg Company’s board of directors approved the split on September 11. One share of WK Kellogg for every four shares of Kellogg was given to shareholders, as per the shares held by them on September 21.
After the debut of WK Kellogg Co, its stock price fell by 8 percent while Kellanova shares saw a fall of approximately 6 percent Monday afternoon trading. WK Kellogg Co. has popular cereal brands including Kellogg, Froot Loops, and Corn Flakes, while Kellanova keeps its snack brands such as Pringles, Pop Tarts and Cheez-It. It also has the frozen food unit of the company called Morningstar Farms.
As reported by CWEB earlier, the iconic 117-year-old parent company decided to separate into 3 standalone companies in June. However, investors and consumers lost interest in its plant-based categories so that brand continues to remain with Kellanova.
Cereal sales are facing stagnation. There are also a wider variety of breakfast cereals available in the market including celebrity endorsed ones. Customers are also reportedly looking at convenience and this has also led to stagnation in the growth of breakfast cereals.
The Street thinks that margins in its cereal business need to improve and costs have to be cut as the cereal industry is facing a period of slow growth.
Snacks, however, are growing at a faster pace than before. Many consumers seem to be snacking between meals and the market is growing, as of now but could change with the advent of weight loss drugs gaining popularity in future.
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CWEB News Summarized Business and Stock Newsletter October 2, 2023
