Kraft Heinz (KHC.US) board approves spin-off plan, intends to establish two independent publicly listed companies through separation.

According to Jinse Finance, Kraft Heinz Company (KHC.US) announced on Tuesday that its board of directors has unanimously approved a spin-off plan—splitting the company into two independent publicly listed companies through a tax-free spin-off.

This spin-off aims to simplify operational processes, allowing the two new companies to focus on their respective development goals: maintaining the scale necessary to remain competitive while further improving operational performance.

So far this year, Kraft Heinz’s stock price has fallen by 9%; however, in pre-market trading, the stock rose by 1.89% to $28.50.

Kraft Heinz stated that the two companies after the spin-off are expected to have ample free cash flow, which can be used to support organic growth, return capital to shareholders, and explore strategic transaction opportunities.

In addition, the company’s current dividend level is expected to remain unchanged overall; management’s goal is to optimize the capital structure to ensure both companies maintain investment-grade credit ratings.

This food and beverage giant began evaluating various strategic options in May this year. After analyzing multiple paths, it ultimately decided to split its business into two independent companies—namely, “Global Taste Elevation Co.” and “North American Grocery Co.”