Kraft Foods (KFT), which said in early August it would divide into two separate companies, announced this week the new CEOs and chairs for both divisions.

Irene Rosenfeld, CEO of Kraft since 2006 and chairwoman since 2007, will head the new Global Snacks business. Tony Vernon, currently president of Kraft Foods, North America, will be CEO of the new North American Grocery Business. He will be joined by John Cahill from private equity firm Ripplewood Holdings as non-executive chairman.

A quick look at the Trefis breakdown for the company can help us determine the potential impact of this proposed split.


Global snacks business

The yet-to-be-named snacks portion of the business, which will include the chocolate, candy, and gum brands, currently comprises more than 45% of the company's stock price, according to Trefis analysis. It is anticipated to have an estimated $32 billion in annual revenue. This division will be focused on achieving high growth through significant presence in multiple emerging markets. Depending on what divisions are included in this new business, the Trefis value may differ from what is shown in the above chart.

North American grocery business

The North American Grocery business, which will keep the traditional Kraft name, will include the current grocery, beverages, cheese and convenient meals divisions, and comprise approximately 55% of the company's stock price, according to Trefis analysis. This division will have an estimated revenue of $16 billion and will focus on generating high margins with its iconic products.

Impact of division

By dividing the company, CEO Rosenfeld is hoping to allow each section to focus more closely on strategic priorities and allocate its resources appropriately. The division of resources is particularly important after the difficult integration of Cadbury and unpopular price increase for many of its products. In particular, this will benefit the grocery business, which will be able to focus on regaining the market share that it has lost in recent years.

Trefis analysis currently values Kraft stock at $34.68, which is slightly below the market price.

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