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Kraft Heinz is undoing its mega-merger, and it's not the only conglomerate to split

Uncertainty about inflation and tariffs is making more large companies think about restructuring, including splitting off brands that were part of big mergers.

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The upside to corporate merging is shared resources. But all that bureaucracy can make nimble pivots difficult to pull off.
The upside to corporate merging is shared resources. But all that bureaucracy can make nimble pivots difficult to pull off.
Justin Sullivan/Getty Images

Mergers and acquisitions make sense when company strategies go together like salt and pepper, or peanut butter and jelly, or …. Jell-O and Philadelphia cream cheese?

Ten years after Kraft Heinz became one of the world’s biggest food companies, it’s reversing course. The conglomerate that owns brands like Oscar Mayer and Heinz ketchup will split into two. It’s not the only corporation to go this route recently: There’s Warner Bros Discovery, which is separating into two media companies, and Honeywell, which is separating into three.

“When you put companies together there’s some hope that there’s going to be synergy. Somehow they’re going to be better together,” said Erik Gordon, a professor of entrepreneurial studies at the University of Michigan.

Merging means brands can share resources, like marketing departments and supply chains. But it can also create a lot of bureaucracy.

Which is why Gordon said it’s common for merged companies to later break apart.

“The hope is each company will know exactly what it needs to do and will do it more efficiently than some sprawling big conglomerate,” he said.

That shift has become especially important for companies as tariffs restructure the economy. It’s why Emilie Feldman, a management professor at University of Pennsylvania’s Wharton School of Business, thinks more corporations are splitting up.

“I think it’s an uncertainty driven wave,” she said.

Uncertainty about tariffs and inflation, Feldman said, is especially tough for companies that make consumer goods.

Shoppers are switching to generic brands to save money and they’re becoming less interested in processed foods.

“Different demand patterns, different consumption habits,” she said.

By splitting up, Kraft Heinz’s brands can pivot faster.

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