S&P eyes Kellogg negatively

S&P said it revised its outlook for Kellogg Co. to negative from stable, affirmed its BBB issuer rating and placed its ratings on CreditWatch with negative implications.

Kellogg said it plans to separate its, snack (Global Snacking Co.) and plant-based food units into three separate businesses by the end of 2023.

“The outlook revision to negative from stable reflects the possibility that we could lower the ratings, most likely by one-notch, if the transactions are completed and we lower our business risk assessment on Global Snacking Co. While it is Kellogg's intent to unlock the value of its various businesses by pursuing distinct strategic and capital allocation priorities, the company will become a smaller-scale player in the packaged food industry and lose some product diversification,” the agency said in a press release.

Kellogg has not finalized the capital structures and dividend policies for Global Snacking, but it reiterated its commitment to investment-grade ratings for the company and existing financial policies, S&P noted.

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