USA: Kraft Foods announces integration plan for Nabisco acquisition and names key executives
This follows the announcement by Philip Morris Companies Inc. earlier today that the United States Federal Trade Commission (FTC) has approved a consent agreement in connection with the acquisition of Nabisco Holdings Corporation by Philip Morris. FTC approval clears the way for Philip Morris to complete the acquisition of Nabisco.
Upon closing, Nabisco's businesses in North America (including the United States, Canada, Mexico and Puerto Rico) will be integrated into Kraft Foods North America, headquartered in Northfield, IL, and led by Betsy Holden, President and Chief Executive Officer of Kraft Foods North America. Nabisco International businesses will be integrated into Kraft Foods International, headquartered in Rye Brook, NY and led by Roger K. Deromedi, President and Chief Executive Officer of Kraft Foods International. On a worldwide basis, the new Kraft Foods with Nabisco becomes a $35 billion revenue company, with $5.5 billion in underlying operating companies income, based on 1999 pro forma combined results.
Kraft Foods North America
``This is a landmark event for Kraft,'' said Betsy Holden, President and Chief Executive Officer of Kraft Foods North America. ``Nabisco brings to Kraft exceptional brands and outstanding people. As these two great companies come together, we are creating an industry leader committed to growth, focused on innovation, and powered by world-class quality, productivity and customer service.''
The new Kraft Foods North America will have the following financial reporting segments: Cheese, Meals and Enhancers; Oscar Mayer and Pizza; Biscuits, Snacks and Confectionery; and Beverages, Desserts and Cereals. These four segments are comprised of 14 operating divisions, including three new business divisions. The integration will affect primarily the Biscuits, Snacks and Confectionery segment and the Cheese, Meals and Enhancers segment. In addition, the company is realigning other Nabisco businesses into existing divisions and consolidating Nabisco's support functions and activities into the appropriate Kraft functional groups.
Kraft Foods North America is creating three new divisions in its Biscuits, Snacks and Confectionery segment - the Nabisco Biscuit Division, located in East Hanover, NJ, and the Confections Division and the Planters Division, located in Parsippany, NJ. Rick Lenny, 48, formerly President, Nabisco Biscuit Company, has been named Group Vice President, Kraft Foods, and President, Nabisco Biscuit and Snacks, with responsibility for the three divisions within the Biscuits, Snacks and Confectionery segment. He will report to Holden and serve as a member of the Kraft Foods North America Management Committee, the company's senior-most decision and policy-making group.
To bring greater strategic focus to the biscuit category, the Nabisco Biscuit Division will now include the U.S. and Canadian cookies and cracker businesses. Leading this division will be Daryl Brewster, 44, formerly President of Specialty Products at Nabisco, who has been named Executive Vice President, Kraft Foods, and General Manager of the Nabisco Biscuit Division. The Milk-Bone dog biscuit business will also be part of the division.
The Confections Division will include all of Nabisco's confectionery businesses such as Lifesavers and Favorite Brands candies. Denise Morrison, 46, formerly Nabisco Senior Vice President and General Manager, Down the Street Channels, has been appointed Executive Vice President, Kraft Foods, and General Manager of the Confections Division. In addition, to take advantage of significant growth and synergy opportunities, Kraft's Callard & Bowser business will become part of the new Confections Division. The Balance Bar business will remain in the Desserts Division, part of Kraft Foods North America's Beverages, Desserts and Cereals segment.
The Planters Division will include all of the Planters nut products. David Yale, 45, previously Vice President and General Manager of Planters at Nabisco, has been appointed Executive Vice President, Kraft Foods, and General Manager of the Planters Division.
In addition, Brian Driscoll, 41, formerly Senior Vice President of Sales and Logistics, the Nabisco Biscuit Company, has been named Senior Vice President of Sales and Customer Logistics for Nabisco Biscuit and Snacks, with responsibility for the U.S. Direct Store Delivery sales system supporting the Nabisco Biscuit Division, along with Confections and Planters.
Brewster, Driscoll, Morrison and Yale will all report to Lenny and join Kraft Foods North America's Operating Committee, comprised of the company's top divisional and functional leadership.
In addition to these three new divisions, Kraft Foods North America will add other businesses to the company's existing division structure.
A.1. steak sauce and Grey Poupon mustard will join Kraft's Cheese, Meals and Enhancers segment, in its New Meals Division, based in Glenview, IL.
The Nabisco U.S. Foodservice business will become part of the Kraft Food Services Division in Glenview, and will be led by Steven Rudnitsky, 41, formerly President, Food Service at Nabisco, and now Executive Vice President, Kraft Foods, and President of the Kraft Food Services Division, reporting to Dave Johnson, Group Vice President, Kraft Foods, and President, New Meals and Food Services. Rudnitsky will also serve on Kraft Foods North America's Operating Committee. The Canadian Nabisco foodservice business will become part of the Kraft Canada foodservice business.
Todd Brown, 51, previously Executive Vice President, Kraft Foods, and President of the Kraft Food Services Division, has been named Executive Vice President, Kraft Foods, and President of the E-Commerce Division, reporting to Paula Sneed, Group Vice President, Kraft Foods, and President of E-Commerce and Marketing Services. He will continue to serve on Kraft's Operating Committee.
In addition, Kraft Foods North America now will have responsibility for all Kraft and Nabisco businesses in Mexico and Puerto Rico. The Nabisco Mexico business will be integrated into Kraft Mexico, reporting to Joe Nahmias, Vice President of Kraft Foods, and General Manager of Kraft Mexico. Nahmias reports to Mary Kay Haben, Group Vice President, Kraft Foods, and President, Kraft Cheese Division, Mexico and Puerto Rico. He serves on the company's Operating Committee. The Nabisco Puerto Rico business will become part of Kraft in Puerto Rico, which also reports to Haben.
Nabisco corporate support departments for the most part will become part of the appropriate Kraft Foods North America functions, including Corporate Affairs, E-Commerce, Finance, Human Resources, Information Systems, Legal, Marketing Services, Procurement, Quality, Research & Development, and Strategy.
Kraft Foods International
``We are very pleased with our finalized Kraft Foods International organization and the key appointments that will occur upon closing of the Nabisco acquisition,'' said Roger K. Deromedi, President and Chief Executive Officer of Kraft Foods International. ``Along with Nabisco's outstanding brands, we have terrific Nabisco International employees joining Kraft Foods International and have created a well-balanced organization. I am confident that the integration of the businesses will go smoothly and quickly.''
The new Kraft Foods International financial reporting segments will be the Europe, Middle East and Africa (EMEA) segment and the Latin America and Asia Pacific (LAAP) segment.
Within these broad segments, Kraft Foods International will continue to organize itself into four regions, each with its own president. The EMEA segment includes two regions: Central, Eastern Europe, Middle East and Africa (CEEMA) region and the European Union region (also including Norway and Switzerland). The LAAP segment includes two regions: Latin America region and Asia Pacific region.
Nabisco International businesses will be integrated into the corresponding Kraft Foods International regions. To move the integration process forward, Kraft Foods International announced key executive positions in Latin America and Asia Pacific, the two regions most impacted by the acquisition.
In Latin America, a region that virtually doubles in size with Nabisco, Joachim Krawczyk, Kraft Foods International President Latin America, and a 21-year veteran of the company, will assume further responsibility for the former Nabisco businesses within Latin America. The structure of Kraft Foods International's Latin America region, based in Rye Brook, N.Y., will continue with four areas, including Brazil, Southern Cone (Argentina, Chile, Uruguay, Paraguay), Andean Pact (Venezuela, Colombia, Peru, Ecuador, Bolivia) and CARICAM (Central America and Caribbean).
The following individuals have been named to new positions, all reporting to Krawczyk:
- Gustavo Abelenda, 39, (formerly Vice President Food Brazil, Kraft Foods International) to Managing Director Kraft Foods Brazil, headquartered in Curitiba, Brazil
- Gilberto Maldonado, 43, (formerly Nabisco's Regional President, Andean) to Area Director Andean Pact, headquartered in Caracas, Venezuela
- Ramon de Mendiola, 36, (formerly General Manager Food, Central America, Kraft Foods International) to Area Director, CARICAM, headquartered in San Jose, Costa Rica
The Area Director, Southern Cone will be named in the near future.
Michael Polk, Kraft Foods International President Asia Pacific, based in Melbourne, Australia, will take on additional responsibility for the former Nabisco International businesses within this region upon closing. The Asia Pacific areas most directly affected are:
- The Greater China area, which consists of the People's Republic of China, Hong Kong, Macau and Taiwan. David Chan, Vice President & Area Director Greater China, Kraft Foods International, will assume additional responsibility for the combined Kraft Foods International and Nabisco International in the area, based in Beijing, People's Republic of China.
- Southeast Asia area, which includes businesses within the Philippines, Indonesia, Thailand, Vietnam, Guam, Malaysia, Brunei and elsewhere in greater Indo-China, will be headed by Bienvenido (Pet) Bautista, 53, Vice President and Area Director Southeast Asia, Kraft Foods International, who will assume additional responsibility for the combined Kraft and Nabisco businesses, based in Manila, Philippines.
Hugh Roberts, Kraft Foods International President CEEMA, based in Vienna, Austria, will have responsibility for Nabisco's joint venture in the Republic of South Africa. Stuart Hancocks, 39, formerly with Nabisco, will continue as Managing Director, South Africa. Hancocks will report to Frank Rosa, Area Vice President Middle East, Africa and Turkey.
Finally, Ronnie Bell, Kraft Foods International President European Union, based in London, United Kingdom, will have oversight responsibility for the company's interest in the United Biscuits venture.
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