Kraft Heinz pauses work to split the company, says challenges ‘fixable’

Kraft Heinz on Wednesday said it is pausing work on its previously announced plans to split the company.

CEO Steve Cahillane, who joined Kraft Heinz in January, said in a statement that many of the company’s issues are “fixable and within our control.”

“My number one priority is returning the business to profitable growth, which will require ensuring all resources are fully focused on the execution of our operating plan,” he said. “As a result, we believe it is prudent to pause work related to the separation and we will no longer incur related dis-synergies this year.”

Kraft Heinz also plans to invest $600 million to fuel a turnaround of its U.S. business. The company plans to spend the money on its marketing, sales, and research and development. The investment will also go toward “product superiority and select pricing,” according to Cahillane.

In September, the company announced plans to break up, reversing much of the blockbuster $46 billion merger from a decade ago that created one of the biggest food companies in the world.

While investors originally cheered the merger, the luster faded as the combined company’s U.S. sales slipped, and it wrote down many of its iconic brands, like Oscar Mayer and Maxwell House. For at least six years, Kraft Heinz has been in turnaround mode, trying to revive its U.S. business.

Warren Buffett, who helped mastermind the deal, said he was disappointed in the decision to split. Berkshire Hathaway, under new CEO Greg Abel, has since taken a formal step toward unwinding its 28% stake in Kraft Heinz.

“We support CEO Steve Cahillane and the Kraft Heinz Board of Directors’ decision, under Steve’s new leadership, to pause work on the company’s previously planned separation. As a result, management can commit to strengthening Kraft Heinz’s ability to compete and serve customers,” Abel said in a statement.

For years, Kraft Heinz has underinvested in its brands, and executives appeared unwilling to change that strategy, Piper Sandler analyst Michael Lavery wrote in a note to clients on Wednesday.

“This appears to have changed with the hiring Steve Cahillane, who has reshaped KHC’s 2026 plans (and proposed split) much more significantly than we had expected in just the six weeks since he started as KHC’s CEO,” Lavery said. “We still believe this remains a ‘show me’ story, and that this is only the first step in getting KHC in a position for sustainable growth, which still looks unlikely to come soon.”

Kraft Heinz announced Cahillane’s hiring in December. He previously led Kellogg through its own breakup and then headed Kellanova, itself a spinoff, until its sale to Mars.

Not everyone on Wall Street was sold on the reversal Wednesday. Shares of Kraft Heinz fell as much as 5% in early trading…