Kraft Foods plans to split into 2 companies

Kraft Foods Inc. said Thursday that it plans to split into two publicly traded companies, with one concentrating on its snack business like Oreo cookies and Trident gum while the other focuses on the North American grocery business, which includes Kraft cheese and Maxwell House coffee.

The move comes as more companies, including Wal-Mart Stores Inc., Target Corp. and various dollar stores, are increasing their grocery sections to capitalize on consumers' one-stop shopping needs.

"Our strategic actions have put us in a position to create two great companies, each with the leadership, resources and strong market positions to realize their full potential," Chairman and CEO Irene Rosenfeld said in statement.

The food maker's stock gained 92 cents, or 2.7 percent, to $35.22 in pre-market trading.

Kraft has steadily built up its snacks business over the years, helped in part by the acquisitions of LU biscuit from Danone and Cadbury PLC. The food maker said that the snacks company would include the current Kraft Foods Europe and developing markets units and the North American snacks and confectionery businesses. The non-snacks component of the business would include mostly powdered beverages and coffee.

The snacks business is estimated to have revenue of about $32 billion.

The grocery business, with estimated revenue of approximately $16 billion, would contain the current U.S. beverages, cheese, convenient meals and grocery segments and non-snack categories in Canada and food service. Its brands would also include Jell-O desserts.