“Organic growth is not Kraft Heinz’ expertise” - analysts at Credit Suisse
Amid recent financial troubles at Kraft Heinz, Warren Buffet has announced that he will leave Kraft Heinz' board of directors:
Warren Buffett on Monday will step down from the board of Kraft Heinz after five years, leaving the food group in which his Berkshire Hathaway investment company has a 27 per cent stake with an uncertain future.The 87-year-old made the announcement in February — almost exactly a year after Kraft Heinz’s failed $143bn bid for Unilever — giving his reason as a wish to travel less.
His departure comes at a pivotal time for Kraft Heinz and has raised questions about his relationship with 3G Capital, the New York-based private equity group founded by Jorge Paulo Lemann that is the other major shareholder.
Since Kraft Heinz is not known for taking strides in innovation (see image below), investors believe that the corporation has been eyeing a hostile M&A deal with one of several other conglomerates including Unilever, Mondelez, and PepsiCo. While Warren Buffet opposed such a deal, 3G Capital, headed by "Brazil's richest man" Jorge Lemann, seems to be inclined to go through with it. Disagreements regarding the deal could explain Buffet's departure. Now with Buffet gone, Kraft Heinz might finally be able to realize its M&A dreams (maybe not PepsiCo or Unilever...).
What do you think the future holds for Kraft Heinz? Will it go after a hostile deal?
Can Kraft Heinz save itself through consolidation?
Why do you think Buffet left?
Thoughts?
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