Warren Buffett 57 billion dollars for a sake

The shares decreased by 7 % after the announce Berkshire Hathaway He still has a 27.5 % stake, was frank about his feelings.

“He certainly did not turn into a great idea to bring them together, but I do not think that their dismantling will fix it,” CNBC told CNBC, adding that he “is disappointed” from the decision.

Divide in two

Company Declare It will be divided into two publicly traded companies by late 2026:

• Global taste height company You will focus on the classic Heinz elements, such as sauces, differences, spices, Heinz Ketchup, Kraft Mac & Cheese, and Philadelphia Cream Creese.
• Grocery company in North America It will be home to the famous amazing like Oscar Mayer, individual Kraft, MaxWell House, and Lougables. The current CEO Carlos Abrams River will lead this unit, while the Board of Directors is looking for a new leader for the high global taste.

CEO Miguel Patricio launched this step as a way to simplify the allocation of capital and sharpen the strategic focus at the marketing level.

“We can allocate the appropriate level of attention and resources to lock the capabilities of each brand,” is it He said the Wall Street Journal.

The chapter comes after a decade of performance. Since Kraft and Heinz were integrated in 2015, the stock has lost more than $ 57 billion in market value, was beaten at $ 15 One billion in deletionAnd consumer rejection waves Shoppers move away Of the treated foodstuffs.

Pavite was frank about the error. In 2019, it is I confess Berkshire was “driven on Kraft.” Since then, Oracle of omaha has written billions at stake, while Capital 3G calmly went out, leaving Berksheer as a shares often exposed.

Will the division help?

This chapter constitutes a tougher problem for investors: if consumers flee “old” brands that did not adapt to health and wellness standards today, why should the brands be better separated in the same silos?

“More marketing support is not a form of Magic Elixir”, analyst and Yahoo finance Executive editor Brian Suzy books on LinkedIn About the deal.

Robert Moscow argued from TD Cowen to magazine Food blocs often exaggerate in estimating the benefits of size. He said: “Food companies have found that their influence in the grocery store does not necessarily result in the advantages they expected.”

In other words, the division of Kraft Heinz into two units may remove some bureaucratic efficiency, but this does not change the fact that there is less demand than the customer on hot dogs or processed foods such as Lunchbles. For Bavate, the division is a symbolic closure separation from a rare rare investment. Oracle also prepares to deliver The reins To Greg Abel at the end of the year, Kraft Heinz will stand as a warning story: even the most famous brands cannot exceed consumer tastes.