Kraft Foods Group Announces $650 Million Restructuring
Ensures spinoff set up efficiently, can execute strategy as standalone company
NORTHFIELD, Ill. -- On Oct. 29, 2012, Kraft Foods Group Inc.'s board of directors approved a $650 million restructuring, related implementation and spinoff transition program, the company said in a U.S. Securities & Exchange Commission (SEC) filing.
Global snacks business Mondelez International Inc., formerly Kraft Foods Inc., completed the previously announced spinoff of its North American grocery business, Kraft Foods Group Inc., in early October.
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The $650 million restructuring reflects primarily severance, asset disposals, other manufacturing-related one-time costs and professional service fees within the company's finance, legal and information systems functions.
The program is part of, and its costs are consistent with, a restructuring program previously announced by its former parent company prior to its spinoff from Mondelez on Oct. 1.
The primary objective of the restructuring program activities is to ensure that Kraft Foods Group is set up to operate efficiently and execute its business strategy as a standalone company, it said in the filing.
Approximately one-half of the total restructuring program costs are expected to result in cash expenditures.
In addition to approving the restructuring program, the board approved related capital expenditures of $200 million.
It said that it expect to complete the restructuring program by the end of 2014.
Northfield, Ill.-based Mondelez is a world leader in chocolate, biscuits, gum, candy, coffee and powdered beverages. The company comprises the global snacking and food brands of the former Kraft Foods Inc. following the spinoff of its North American grocery operations in October 2012. Mondelez's portfolio includes several billion-dollar brands such as Cadbury and Milka chocolate, Jacobs coffee, LU, Nabisco and Oreo biscuits, Tang powdered beverages and Trident gum. It has annual revenue of approximately $36 billion and operations in more than 80 countries.
Kraft Foods Group is North America's fourth largest consumer packaged food and beverage company, with revenues of approximately $19 billion in 2011. The company has a portfolio of products in the beverages, cheese, convenient meals and grocery categories. Its brands include Kraft, Maxwell House, Oscar Mayer, Planters and Jell-O.