"In 2015, Warren Buffett, the Oracle of Omaha, teamed up with private equity firm ( 3G Capital to orchestrate the $46 billion merger of Kraft Foods and H.J. Heinz, creating Kraft HeinzNYSE:KHC), a packaged food titan. Buffett's vision was to unite iconic brands like Heinz ketchup and Kraft Mac & Cheese under one roof, banking on scale, cost synergies, and brand loyalty to drive profits. But the dream soured fast."
"Aggressive cost-cutting by 3G stifled innovation, and shifting consumer tastes toward healthier, fresher foods eroded sales. KHC's stock has plummeted 60% since the merger, and ( Berkshire HathawayNYSE:BRK-A)( NYSE:BRK-B), which holds a 27.5% stake, slashed its carrying value from $17 billion in 2017 to $8.4 billion last month. Now, KHC has announced it will split into two companies by mid-2026."
"Kraft Heinz's split will create two publicly traded companies, each with distinct focuses to address their divergent trajectories. The first, tentatively called Global Taste Elevation, will house faster-growing segments: sauces, spreads, and shelf-stable meals, including Heinz ketchup, Philadelphia cream cheese, and Kraft Mac & Cheese. This entity reported $15.4 billion in 2024 net sales, with 75% from condiments and seasonings, and boasts stronger international appeal, with 20% of sales from"
Warren Buffett and 3G Capital executed a $46 billion merger of Kraft Foods and H.J. Heinz to gain scale, brand synergy, and cost synergies. Aggressive cost-cutting by 3G curtailed innovation while consumer trends shifted toward healthier, fresher foods, eroding sales. Kraft Heinz's stock has fallen about 60% since the merger, and Berkshire Hathaway reduced its carrying value from $17 billion to $8.4 billion. Kraft Heinz plans to split into two public companies by mid-2026. The first unit, Global Taste Elevation, will focus on sauces, spreads, and shelf-stable meals and reported $15.4 billion in 2024 net sales.
Read at 24/7 Wall St.
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