Kellogg (K) board approves seperation into two companies

Kellogg Company (NYSE: K) today announced that its Board of Directors formally approved the previously announced separation into two independent, publicly traded companies, Kellanova and WK Kellogg Co.

Upon completion of the separation on October 2, 2023, Kellogg Company will be renamed Kellanova, and will continue to trade on the New York Stock Exchange (NYSE) under the ticker symbol "K", while WK Kellogg Co is expected to begin trading on the NYSE under the ticker symbol "KLG".

At 12:01am EDT on October 2, 2023, Kellogg shareowners of record as of September 21, 2023, will receive 1 share of WK Kellogg Co (KLG) for every 4 shares of Kellogg Company (K) owned.

"After more than a year of comprehensive planning and execution, we are more confident than ever that the separation will produce two stronger companies and create substantial value for shareowners," stated Steve Cahillane, Kellogg Company's Chairman and Chief Executive Officer.

Two Stronger, More Focused Companies

Kellanova will feature a growth-oriented portfolio that is weighted toward snacks and emerging markets, and will be led by highly differentiated brands with considerable opportunity for expansion. It is projected to generate net sales of approximately $13.4-$13.6 billion and adjusted-basis EBITDA¹ of approximately $2.25-$2.3 billion² in 2024. Kellanova expects to deliver long-term annual growth rates of 3-5% for net sales (organic basis), 5-7% for operating profit (currency neutral and adjusted basis), and 7-9% for earnings per share (currency neutral and adjusted basis), including in 2024 on a like-for-like basis excluding WK Kellogg Co.

"We are looking forward to a new era as Kellanova, marked by a more growth-oriented portfolio, a renewed vision and strategy, and an energized organization grounded by a winning culture and our founder's values," said Mr. Cahillane, who will remain Chairman and Chief Executive Officer of Kellanova. "These elements build on what has already been a track record of strong and consistent financial performance for the Kellanova portfolio."

Building on a foundation of iconic brands and a leading share position in North American cereal, WK Kellogg Co will focus and integrate its commercial strategy and execution, while modernizing its supply chain, all of which it expects will result in improved competitiveness, profitability, and cash flow. WK Kellogg Co projects net sales of approximately $2.7 billion and adjusted-basis EBITDA¹ of approximately $255-$265 million² in 2024. It expects to improve its adjusted-basis EBITDA margins by 500 basis points² by the end of 2026, through supply chain modernization and a stable top-line trajectory.

"WK Kellogg Co has a 117-year legacy of innovation and the soul of a start-up, with an organization incredibly energized by our future," remarked Gary Pilnick, who will serve as WK Kellogg Co's Chairman and Chief Executive Officer following the separation. "As a standalone company, we will benefit immediately from the executional advantages of increased focus and end-to-end integration, while we modernize our supply chain and substantially improve our profit margins. We're on a profitable journey to take this great business to the next level."

For details regarding the two companies' strategies, capital structures, and financial outlooks, please refer to the press release and presentations from the Company's August 9, 2023, "Day@K" investor event.

Additional Details About the Distribution

The completion of the distribution is subject to a number of customary conditions, including the Securities and Exchange Commission (the "SEC") having declared effective WK Kellogg Co's Registration Statement on Form 10, as amended, which WK Kellogg Co has filed with the SEC and is available at the SEC's website at http://www.sec.gov. In addition to the public filing of the Form 10, Kellogg Company has posted supplemental business and other information about the Company and WK Kellogg Co to its investor website at http://investor.kelloggs.com. A dedicated website providing ongoing information about the separation is available at https://www.unleashingourpotential.com.

The receipt of WK Kellogg Co common stock in the distribution will be tax-free to Kellogg Company shareowners for U.S. federal income tax purposes, except for the gain or loss attributable to cash received in lieu of fractional shares of WK Kellogg Co common stock. Kellogg Company shareowners are urged to consult with their tax advisors with respect to the U.S. federal, state and local or foreign tax consequences, as applicable, of the separation.

Kellogg shareowners of record on September 21, 2023, will receive one share of WK Kellogg Co common stock for every four shares of Kellogg Company common stock they hold. Kellogg Company expects that a "when issued" public trading market for WK Kellogg Co's common stock will commence on September 27, 2023 under the symbol "KLG WI." Kellogg Company also anticipates that "regular way" trading of WK Kellogg Co's common stock will begin on October 2, 2023.

Kellogg Company has been advised by the NYSE that Kellogg Company common stock will trade "regular way" with due-bills on the NYSE under the symbol "K" from September 20, 2023 through September 29, 2023. On September 27, 2023, an ex-distribution market for Kellogg Company common stock will begin on the NYSE under the symbol "K WI" and continue through September 29, 2023. Any holders of shares of Kellogg Company common stock who sell Kellogg Company shares regular way on or before September 29, 2023 will also be selling their right to receive shares of WK Kellogg Co common stock. Additionally, holders of shares of Kellogg Company common stock who sell in the "ex-distribution" market on or before September 29, 2023 will be selling only his or her shares of Kellogg Company common stock and will be retaining his or her right to receive shares of WK Kellogg Co common stock in the distribution. Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling WK Kellogg Co common stock on or before the distribution date.

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