Kraft owner to spin off the firm

Many of Kraft's products are household brand names

Kraft, the world's second-largest food and drinks firm, is to be spun off by its owner into a separate business, its parent company has announced.

The US-based Altria Group, which also owns the Philip Morris tobacco company, holds 89% of the shares of Kraft.

The move will allow Kraft to make more acquisitions the firm said.

Kraft, whose brands including Oreos, Maxwell House and Philidelphia cream cheese, also announced lower profits in the last quarter of 2006.

It earned $624m (£318m) between October and December, against $773m the same period a year ago.

Altria hopes the spinning-off will allow managers to focus more on their specific companies.

Some analysts have said that by separating Kraft from Phillip Morris, it protects the assets of the food and drinks company from any payments needed as a result of legal action brought against the tobacco firm.