Kraft Foods has announced that the US Internal Revenue Service (IRS) has provided a favourable private letter ruling confirming the tax-free status of the planned spin-off of the company's North American grocery business and certain related internal reorganisation transactions.
Following the transaction, the North American grocery business will be an independent, public company operating as Kraft Foods Group.
Dave Brearton, executive vice president and chief financial officer, said: "This favourable tax ruling from the IRS is a significant milestone in the spin-off process. We remain firmly on-track to launch two industry-leading companies before the end of 2012."
The spin-off is subject to a number of conditions, including the continued validity of the private letter ruling from the IRS, the effectiveness of Kraft Foods Group's Registration Statement on Form 10 that was filed with the US Securities and Exchange Commission, as amended, the execution of inter-company agreements related to the spin-off and final approval from the Kraft Foods Board of directors.
Source: Kraft Foods
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