BATTLE CREEK — The top executive at Kellogg Co.’s largest shareholder sees opportunity for greater growth and earnings under the Battle Creek food manufacturer’s transformation into three separate publicly traded companies.
The W.K. Kellogg Foundation — formed by Will Keith Kellogg in 1930 as an independent, private charitable organization — is a legally separate entity from the manufacturer. The foundation and its trust will remain the largest shareholder in the three companies, foundation President and CEO La June Montgomery Tabron said in a recent interview with MiBiz. (See page 22.)
“The Kellogg Foundation will be impacted, but not significantly,” Montgomery Tabron said of the restructuring. “Our overall ownership won’t change — it may grow, actually. It’s going to grow as these companies continue to grow and prosper. What we see at the Kellogg Foundation is greater earnings that we can then give away to communities, children and families to do our work.”
The Kellogg Foundation Trust owns more than 57.2 million shares in Kellogg, valued at $4.09 billion. That’s nearly twice as many as the next largest shareholder, Pennsylvania-based investment adviser The Vanguard Group. Other major Kellogg shareholders include Blackrock, Keybank National Association and State Street, each with shares in Kellogg valued at more than $1 billion.
Kellogg’s major announcement in June laid out plans to divide the company into three separate, publicly traded entities. North America Cereal Co. and Plant Co. would both remain headquartered in Battle Creek under the plan. The largest and most profitable entity, Global Snacking Co., would maintain dual campuses in Battle Creek and Chicago, according to company executives. The restructuring plan could take 18 months to complete.
Montgomery Tabron said the company’s initial restructuring announcement was met in the community with “surprise.”
“I think it took a while for people to get their arms around the potential. Now what I hear as I speak with the leaders in the community is that it creates opportunity. It creates an opportunity to have these separate entities still very much operating within the city and opportunity to really think about what complementary businesses that we want to recruit to the area as well,” she said.
The Kellogg Foundation’s income primarily comes from the trust. The foundation and trust had more than $8.2 billion in total assets as of Aug. 31, 2020 and issued roughly $250 million in grants that year, according to a recent annual report.
“For all of us, it’s a moment to reflect and to rebuild, and we’re going to make this a part of our rebuilding strategy,” Montgomery Tabron said of the company restructuring. “I think the W.K. Kellogg investments over the past 90 years are still very key investments in this community. We have assets in Battle Creek that many communities our size do not have and we want to leverage that.”
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