Warren Buffett gurus say he made a 'rare' mistake with Kraft Heinz, now food giants are breaking up

"Two years later, they teamed up again to merge Heinz with Kraft in a $40 billion deal. Buffett, a fast-food aficionado, called it "my kind of transaction," adding that the combined company could "supply you Heinz ketchup or mustard to go with your Oscar Mayer hot dogs that come from the Kraft side. Add a Coke, and you will be enjoying my favorite meal.""

"Private equity firms often seek to quickly cut a company's costs and change its management to raise its value so they can sell it for a profit and use the money to fund their next acquisition. In contrast, Berkshire is known for offering permanent, hands-off ownership to businesses it buys, and seeks to avoid bloat instead of eliminate it, as Buffett laid out in his 2015 shareholder letter."

Kraft Heinz is splitting after a decade marked by declining performance following its 2015 merger. Berkshire Hathaway and 3G Capital acquired Heinz in 2013 and merged it with Kraft in 2015 to create a $40 billion food conglomerate. Aggressive cost cuts, layoffs, management overhauls, writedowns and asset sales followed, impairing innovation. The partnership's private-equity-style approach clashed with Berkshire's traditional hands-off ownership model. Shifting consumer tastes, lower-cost rivals and the rise of weight-loss drugs eroded demand for some legacy brands, prompting the corporate breakup. Buffett plans to retire later this year after 55 years in charge.

Read at Business Insider