(Bloomberg Opinion) — The aftertaste of bad dealmaking is long lasting.

While it makes sense to unwind the merger that created Kraft Heinz Co. — as the company is doing through a split announced Tuesday — investors should be realistic about what going back to square one (and a bit) achieves.

Kraft Heinz will become two publicly traded US companies, one housing the famous Heinz condiment brands along with Kraft icons Philadelphia cream cheese and Mac & Cheese. Ostensibly, the attraction of the stock in the “Global Taste Elevation Co.,” the placeholder name for that business, will be its growth, notably from emerging markets. The new sibling will be “North American Grocery Co.,” for now, and include most of the other Kraft brands, including Lunchables and Capri Sun. Here, the greater lure will be a decent dividend.

The saga underscores some core business truisms. Size is advantageous only up to a point. Too much scale creates complexity, which is hard to manage, and stifles innovation. The idea that you can sell more goods just by expanding your distribution has also taken a knock. What sells in one country doesn’t sell everywhere. Focused companies are easier to run, and businesses with distinct investment stories attract shareholders otherwise deterred from buying a bundle. Investors can achieve diversification themselves.

And yet Kraft Heinz’s share price is lower now than it was when the company flagged it was mulling “strategic transactions” in May, and roughly where it was in July just before the likelihood of a split became public.

Analysts at Morgan Stanley recently put Kraft Heinz’s breakup value at around $27.50 a share (before the details of the split were confirmed), barely above the current price after a 7% drop on Tuesday. Meanwhile, JPMorgan Chase & Co. analysts are skeptical that the higher-growth pieces of the empire will command a stronger valuation than what was already baked into the stock. The fact that Kraft Chief Executive Officer Carlos Abrams-Rivera will run the US grocery business doesn’t help allay such fears. At $10 billion, its sales last year were one-third less than the Taste Elevation portfolio; at $2 billion, its profit (measured by earnings before interest, tax, depreciation and amortization) was half as big.

The overall muted reaction is a reminder that undoing a deal through separation — plus a few bells and whistles — isn’t an act of magic. It means absorbing one-off costs in the actual division and duplicating expenses such as a new head office and listing costs when creating a new public company. In this case, there will be a $300 million annual burden. For simplicity’s sake, value that on, say, a 10-times multiple. The upfront impact of the hit is then nearly 10% of the company’s market capitalization. That sets a high bar for what the benefits of focus must now achieve.

The risk is it’s all just a zero-sum game.

It’s worth bearing in mind, too, the negative reaction to Keurig Dr Pepper Inc.’s recent deal to bulk up in coffee and then split into separate soft drink and coffee businesses. Investors know well enough that there are constraints to what can be achieved rearranging the larder.

Back to Kraft. A separation cannot rapidly undo the business damage from trying to make a misconceived tie-up work over 10 years. Corporate-finance wizardry isn’t so powerful as to transform the performance of assets into what it would have been had they been run inside distinct corporate umbrellas all along. Processed food is processed food, whatever the legal wrapper. A split can’t instantly unleash a wave of innovation in snacking and sauces that will compensate for missed opportunities.

If this is what you’re trying to solve for, there’s only one answer: Don’t do a deal on the misguided premise of scale in the first place.

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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Chris Hughes is a Bloomberg Opinion columnist covering deals. Previously, he worked for Reuters Breakingviews, the Financial Times and the Independent newspaper.

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