US Stock Market Move | Announced suspension of business split plan Kraft Heinz Company (KHC.US) plunged more than 5.8% before the market opening.

On Wednesday, Kraft Heinz Company (KHC.US) fell by more than 5.8% in pre-market trading, to $24.9. The company announced the suspension of its highly anticipated business split plan, just weeks after new CEO Steve Cahillane took office in January. Cahillane stated that halting the split is primarily to prioritize improving profitability, as consumer confidence has weakened since the split plan was announced in September, prompting management to reassess the strategic direction. Cahillane pointed out that many internal issues within the company are fixable, with potential for improvement beyond expectations. Therefore, the decision was made to postpone the split-related work and instead invest $600 million in marketing, R&D, product upgrades, and some price reductions. Previously, the company planned to split fast-growing brands like condiments from the slow-growing traditional food business, with completion expected in the second half of this year. The plan was seen as a crucial step in revisiting the $46 billion acquisition from a decade ago, but the market has remained skeptical, with even long-term shareholder and Berkshire Hathaway CEO Warren Buffett expressing disappointment. The latest financial report shows that the company's fourth-quarter organic revenue declined by 4.2% year-on-year, exceeding market expectations.