CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Kellogg spinoff: Will split of cereal and plant-based food unit charge K stock price?

By Jenny McCall

11:00, 16 September 2022

A image of Kellogg Corn Flakes
On the day of the announcement the stock price was up almost 2% and the groups share price has been up 9% this year - Photo: Shutterstock

The US cereal brand Kellogg Company's (Kslogan "Let's Make Today Great" couldn’t be more appropriate right now, as the group follows up on its announcement in June that it will spin-off parts of its business.

The company made a statement on Tuesday 21 June, that it plans to separate three of its businesses, including its Global Snacking Co, which produces Pringles; its North America Cereal Co, which makes Kellogg’s Rice Krispies; and its Plant. Co business, that is home to all its plant-based products. But what affect will this spin-off have on the Kellogg Company (K) stock price.

What is your sentiment on K?

Vote to see Traders sentiment!

Kellogg Company (K) share price chart

Will the Kellogg stock price change once split takes place?

In an interview with in June, Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said: “By splitting the company into three separate entities, with the cereals and plant-based businesses going it alone, Kellogg clearly has its ambitions firmly trained on its global snacks business, which already makes up the majority of its revenues.”

Kellogg Company (K) said that the split will enable each business to “unlock its full standalone potential and North America Cereal Co. will be a cereal leader in the US, Canada, and Caribbean.”

On the day of the announcement the stock price gained almost 2% and the group's share price has been up 9% this year.

In May, Kellogg (K) set a new 52-week high of $70.21. It is not a post-pandemic high; however, this was reached in July 2020 at $72.88. Nor is it an all-time high which was established four years prior when the world’s top cereal maker soared above $87.

But analysts believe the stock has some upside potential because it remains inexpensive. It is trading approximately 20% below its five-year historical average P/E.

But now that the spin-off has been announced, could Kellogg (K) stock decline?

Caution over split?

After the group's share price rose on 21 June, it appears investors grew cautious about the split and Kellogg’s stock lost the bulk of its gains by close.

The stock was a ‘hold’ rating, based on the views of 11 analysts compiled by MarketBeat at the time of writing on 16 September. The consensus view was that the K stock price has a upside of 1.2% from its current price of $70.34. 

In addition, investors can expect some stock price volatility once the spin-off takes place. Following in the footsteps of GlaxoSmithKline (GSK), which saw a drop in its share price after it spun-off its consumer health care division, investors may see a decline in share price as the businesses are removed from the Kellogg balance sheet, and its market capitalisation reduces. 

GlaxoSmithKline (GSK) share price chart

What will a Kellogg split look like?

Kellogg (K) will separate into three independent companies and will spin-off its US, Canadian and Caribbean cereal, and plant-based businesses which, according to the company, represent approximately 20% of its net sales in 2021.

The remaining business, which accounts for 80% of net sales in 2021, is focused on global snacking, international cereal, and noodles, as well as its North American frozen breakfast.

The company hopes to complete its spin-off by late 2023.


66,707.80 Price
-0.560% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00


2,401.36 Price
-1.830% 1D Chg, %
Long position overnight fee -0.0198%
Short position overnight fee 0.0116%
Overnight fee time 21:00 (UTC)
Spread 1.20


19,526.60 Price
-1.140% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 7.0


0.60 Price
+3.380% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

What does the split mean for investors?

“The proposed spin-offs are intended to result in tax-free distributions of North America Cereal Co. and Plant Co. shares to Kellogg Company shareowners. Shareowners would receive shares in the two spin-off entities on a pro-rata basis relative to their Kellogg (K) holdings at the record date for each spin-off,” the Kellogg statement said.

Investors who aren’t invested in Kellogg (K) or want to increase their investment prior to the split, need to assess the value and potential of each company.


Why Split now?

Kellogg (K) does not want its brands to compete for money and time - well, that’s the official line.

Kellogg (K) CEO Stele Cahillane said: “[Now], Frosted Flakes does not have to compete with Pringles for resources.”

But there are other elements to consider, managing so many brands and different types of products can lead to a lack of innovation.

Cahillane said: 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 company is hoping the split will allow the group's to expand into their unique markets, focus capital and resources where each brand needs it and capitalise on growth opportunities.

With that said, Kellogg (K) is also hoping that by splitting into smaller segment areas, each company’s valuation can then rise or fall to match its worth.

Global Snacking Co.

The Global Snacking co. accounts for $11.4bn in net sales and is a “leading company in global snacking cereal and noodles.”

North America Cereal Co.

The North America Cereal Co. is the second largest division and is worth about $2.4bn in net sales. The group said it “will be a leading cereal company in the US, Canada, and Caribbean, with a portfolio of iconic, world-class brands and compelling opportunities for investment and profit growth.”

Plant. Co.

The final company that will be spun-off by Kellogg is its Plant. Co., which accounts for $340m in net sales and the company said it will be a leading, profitable, pure play plant-based foods group.

“Anchored by the MorningStar Farms brand, with a significant opportunity to capitalize on strong long-term category prospects by investing further in North America penetration and future international expansion,” the Kellogg statement said.

Markets in this article

58.01 USD
-0.9 -1.530%
15.245 USD
-0.115 -0.750%

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 630,000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading