Clarkston Consulting
Skip to content

Kraft Continues to Prepare for Snack Spinoff

Kraft continues to prepare for the spinoff of its global snacks business, which will be renamed Mondelez International Inc., from its grocery business. Bloomberg Businessweek reports that Mondelez will retain about $35 billion in annual sales from brands including Cadbury chocolate and Oreo cookies, while the grocery company will have about $19 billion in revenue, based on 2011 results. The company is on track to complete the spinoff before year-end.

These types of ‘spinoffs’ or divestitures can be the most difficult to execute. They require careful consideration on carving out people, physical assets, systems, data within those systems, networks, contractual relationships, intellectual property, and a host of other items.


Clarkston has worked with clients who had to split a floor of an office, literally putting up a wall in the middle of the physical space. Further complicating these situations are transitional services agreements (TSAs) that are put in place between the two companies about what services the former parent will continue to provide for the divesting entity and for what time period.

TSA’s can be:

  • Very complicated contracts.
  • Can have hefty financial penalties for delays.
  • Are often drawn up by people with little understanding of what is required to execute the elements.

Clarkston’s Mark Ginestro discusses the unique considerations for divestitures in his latest Insights paper, Build an Effective Merger, Acquisition and Divestiture Execution Capability.