Kellogg announced Tuesday that it plans to separate into three independent public companies, sectioning off its iconic brands into distinct snacking, cereal and plant-based businesses.
Shares of the company rose 6.5% in premarket trading on the announcement.
"These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities," CEO Steve Cahillane said in a statement.
The company said it is exploring further strategic alternatives, including a potential sale, for its plant-based business.
Combined, Kellogg's plant-based division and North American cereal business accounted for about 20% of the company's revenue last year. The remaining business includes its snacks, noodles, international cereal and North American frozen breakfast brands.
The tax-free spinoffs are expected to be completed by the end of 2023.
Names for the new companies haven't yet been decided, and proposed management teams for the two spinoffs will be announced by the first quarter of next year. Cahillane will stay on as chief executive of the global snacking company.
That business will house brands like Pringles, Cheez-It, Pop-Tarts and RXBAR and last year reported $11.4 billion in revenue. About 10% of those sales come from its growing noodle business in Africa, while another 10% comes from Eggo waffles and its frozen breakfast business. North America will represent nearly half of the company's revenue.
The snack-focused company will also be looking to add to its portfolio through acquisitions, according to Cahillane.