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Why Is Kellogg Splitting Into Three Companies?

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Kellogg Company (NYSE:K) has announced it is splitting up into three publicly traded companies: snacks, cereal and plant-based foods. The three lines are expected to go solo next year. Since the announcement, Kellogg stock increased 2% yesterday alone, and is up 6% over this year.

Kellogg’s Split

Chris Beauchamp, Chief Market Analyst at IG comments on why Kelloggs made this decision and what the outlook is as a result:

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“Companies go through cycles, and Kellogg is in one now. The decision has been taken to allow the company (or companies) to focus squarely on their key products and at least provides a change in strategy that appears to have been given the market seal of approval (I note it was in a rising market yesterday anyway). 

In addition, no one could ever suggest Kellogg was a go-to tech stock, and its earnings reliability and relative stickiness make it a haven of calm. Further volatility over the summer will only boost its appeal.”

About IG

Established in 1974, IG is a global leader providing trading and investment opportunities to people worldwide. IG analysts report every day on the latest changes in the financial markets, providing timely fundamental, economic, and technical analysis and a close examination of promising chart formations with live currency quotes. IG also provides analysis of market moves, explaining economic, political, and technical factors driving the market.

About Chris

Chris Beauchamp first started at IG in 2010, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News. His background is in equity research and analysis, and he uses these skills to provide in-depth reports on stock market movements.

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