CPC International Inc. on Wednesday said it will spin off its corn-refining operations to shareholders so it can concentrate on producing consumer foods like Hellmann’s mayonnaise, Mazola corn oil and Skippy peanut butter.
“The fit of those businesses [corn refining and packaged foods] is not as good as it was,” CPC Chairman C.R. Shoemate said. “Going forward, they will be able to grow . . . faster by focusing on the key drivers of each of those businesses.”
The stock market applauded the move, sending CPC’s shares up $2.75 to close at $84.75 on the New York Stock Exchange.
CPC’s corn-refining operations yield high-fructose corn syrup, a sweetener; corn starch; dextrose, a food ingredient and sweetener; and traditional corn syrup.
Although corn refining was profitable in 1996, that business was a drag on CPC’s overall earnings caused by dramatic swings in the corn market, the company said.
CPC reported net income of $580 million last year, up from $539 million a year ago.
After shedding the corn business, CPC will concentrate on its global packaged food, bakery and food service businesses, which analysts called among the best in the industry.