Kraft/Mondelez Spin-off Details

Kraft Foods Inc. (KFT) split into two companies as of 10/2/2012. The new entities are Kraft Foods Group Inc. (KRFT) and Mondelez International (MDLZ). KRFT consists of the slower growing North American grocery business while MDLZ is an international food company comprising of the former Cadbury Schweppes products and Kraft's own international food products. Well known brands of KFT include Philadelphia Cream Cheese and Oscar Mayer meats. Well known brands of MDLZ include Cadburys, Trident Gum, Tang powdered drinks, Oreo cookies, etc.

The spin-off worked as follows: Kraft Foods Inc. (KFT) was renamed as Mondelez International (MDLZ). As a result, former shareholders of KFT received one share of Mondelez International (MDLZ) for every share of KFT held. Kraft Foods Group Inc. (KRFT) was spun-off based on a distribution ratio of one share of Kraft Foods Group Inc. (KRFT) for every three shares of Mondelez International (MDLZ). As a result, former KFT shareholders also received one share of KRFT for every three shares of KFT held prior to the spin-off.

Using the prior name of the company (most of it anyway) for the spun-off entity while renaming the original entity made the mechanics of the spin-off complicated to explain. But there it is...


2 comments :

Amit said...

What are your thoughts on the spinoff?
Is it worth looking at?

Amit

ks said...

I have not researched the spin-off enough to give an opinion. The analyst community seems to like KRFT more than MDLZ, but that seems lopsided to me...

Regards,
John.

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