Kraft Heinz said Wednesday it’s pausing its plans to split into two companies.
Steve Cahillane, a former Kellogg chief who became CEO of Kraft Heinz on January 1, said he wants to ensure that all of the company’s resources are focused on profitable growth.
“I have seen that the opportunity is larger than expected and that many of our challenges are fixable and within our control,” Cahillane said in a statement.
The company’s shares dropped 5.2% in early trading Wednesday as Kraft Heinz reported lower quarterly and annual results.
Kraft Heinz announced in September it was splitting into two companies a decade after a merger of the brands created one of the biggest food manufacturers on the planet.
One of the companies would include stronger-selling brands such as Heinz, Philadelphia cream cheese and Kraft Mac & Cheese. The other would include slower-selling brands like Maxwell House, Oscar Mayer, Kraft Singles, and Lunchables.
At the time, Kraft Heinz said it expected the split to be finalized in the second half of this year.
On Wednesday, the company said it will pivot from the split and invest $600 million in marketing, sales, and product development.
In its fourth-quarter earnings release Wednesday, CEO Steve Cahillane said Kraft Heinz’s balance sheet and free cash flow potential were strong.
“We are confident in the opportunity ahead and believe this investment will accelerate our return to profitable growth,” Callihane said.
—Dee-Ann Durbin, AP Business Writer