Kraft Foods, Inc.
), which is in the process of splitting into two independent
companies, a global snacks company and a North American grocery
company, recently announced that its shareholders have approved the
name Mondelez International, Inc. for the global snacks business.
More than 90% of the shareholders who cast their votes favored the
new name. Mondelez literally means a delicious world.
Following the split, global snacks will consist of the current
Kraft Foods Europe and Developing Markets units as well as the
North American snacks and confectionery businesses. The North
American grocery business would consist of the current US
Beverages, Cheese, Convenient Meals and Grocery segments and the
non-snack categories in Canada and Food Service. The spin-off is
expected to be completed before the end of this year.
The North American grocery business, which includes popular
brands like Oscar Mayer meat and Kraft cheese, will be an
independent public company called Kraft Foods Group, Inc. and will
trade under the ticker symbol KRFT. The snacks company, Mondelez
will market popular brands like Cadbury, Jacobs, LU, Milka,
Nabisco, Oreo, Tang and Trident and will trade under the ticker
We currently have a Neutral recommendation on Kraft Foods. The
stock carries a Zacks #3 Rank (a short-term 'Hold' rating).
Overall, we are encouraged by Kraft's strategy of continued cost
management, price increases, expansion into emerging markets and
continued strong momentum from its designated Power Brands.
Further, the spin-off is expected to allow Kraft to focus on its
distinct strategic priorities and allocate resources optimally.
However, we remain concerned about rising input costs and
vulnerability to currency translations.
KRAFT FOODS INC (KFT): Free Stock Analysis
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