Separation transaction

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Proposed separation transaction

Separation transaction

During 2022, Kellogg Company announced its intent to separate its North American cereal business, via tax-free spin-off, resulting in two independent public companies, Kellanova (formerly Kellogg Company) and WK Kellogg Co.

In preparation of the separation, the Company incurred pre-tax charges related to the separation of $56 million and $184 million for the quarter and year-to-date period ended September 30, 2023, respectively, including $3 million and $21 million recorded in COGS, respectively, and $53 million and $163 million recorded in SG&A, respectively. The Company incurred pre-tax charges of $18 million and $22 million for the quarter and year-to-date period ended October 1, 2022, respectively, all of which were recorded in SG&A. These charges were primarily related to legal and consulting costs.

In connection with the separation, WK Kellogg Co entered into several agreements with Kellanova that govern the relationship of the parties following the Spin-Off including a Separation and Distribution Agreement, a Manufacturing and Supply Agreement, a Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement, and various lease agreements

On October 2, 2023, the Company completed the separation of its North America cereal business resulting in two independent companies, Kellanova and WK Kellogg Co. As a result of the distribution, Kellanova shareholders of record on September 21, 2023, received one share of WK Kellogg Co common stock for every four shares of Kellanova common stock. On October 2, 2023, WK Kellogg Co began trading as an independent publicly traded company under the stock symbol “KLG” on the New York Stock Exchange and Kellanova continued trading under the stock symbol "K".