Kraft grocery spin-off to be tax free
Published: Friday, May 18, 2012
Updated: Friday, May 18, 2012 13:05
CHICAGO — Kraft Foods said Friday that the U.S. Internal Revenue Service has approved a tax-free spin-off of its North American grocery business.
The Northfield, Ill.,-based packaged food giant plans to separate its domestic grocery and international snacks businesses, creating two independent public companies this year. The grocery company will remain in Northfield and retain the Kraft Foods name.
“This favorable tax ruling from the IRS is a significant milestone in the spin-off process,” Kraft CFO Dave Brearton said in a statement. “We remain firmly on-track to launch two industry-leading companies before the end of 2012.”
Based on the ruling, Kraft Foods and stockholders should not be taxed for the stock distribution which will take place as part of the spin, with the exception of cash received in lieu of fractional shares.
Kraft’s international snacks business will be based in Deerfield and is expected to be named Mondelez International.