Warren Buffett’s rare misstep: Will Kraft Heinz’s breakup rewrite the ending, or can it still pay off?
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Warren Buffett once bet big on ketchup and mac & cheese, hailing the merger of Heinz and Kraft Foods in 2015 as a chance to bring iconic brands together. A decade later, Kraft Heinz is considering breaking itself up, and what was meant to be a landmark deal for the Oracle of Omaha has turned into one of the most visible flops of his career. But while the tie-up failed to deliver on its promise, the numbers tell a more nuanced story: Buffett’s own investors have managed to escape mostly unscathed. Kraft Heinz is reportedly exploring a breakup, an admission of the merger’s failure and a rare blemish on the storied investor’s record. Shares of Kraft Heinz have slumped more than 60% since the tie-up, dramatically underperforming a roaring stock market, while Berkshire Hathaway Inc.’s 27% stake now sits $4.5 billion below its book value. In 2015, Buffett’s Berkshire Hathaway and private equity firm 3G Capital engineered the merger of Kraft...