Food and consumer products giant Dart & Kraft on Monday revealed the terms of its corporate divorce.
The Northbrook, Ill., conglomerate said Premark International, the consumer products unit, will pay Kraft, the food division, a $300-million, one-time dividend as part of the breakup. William Maguire, an analyst with Merrill Lynch in New York, said that after the split, Kraft will have a cash hoard of about $700 million and little debt.
"Kraft will have an embarrassment of riches," said Roger Spencer, a food industry analyst with Paine Webber. Kraft said it may use the money for acquisitions.
Improving Market Value
Dart & Kraft, formed by the merger of Kraft Foods and Dart Industries six years ago, is spinning off its slower-performing businesses into the new Premark. The move is widely viewed as an effort to improve Kraft's market value, which has been hurt by poor performance in the consumer products businesses.