- Buffett criticized Kraft Heinz’s planned split and lack of a shareholder vote.
- Berkshire’s $8.9B stake has lost significant value since the 2015 merger.
- Analysts agree the split highlights deeper problems in the food giant’s strategy.
Warren Buffett has expressed rare public criticism of one of Berkshire Hathaway’s largest holdings, Kraft Heinz, after the food giant announced plans to split into two companies. Speaking to CNBC’s Becky Quick, Buffett said he was “disappointed” both with the decision itself and the fact that shareholders will not have a vote on the matter.
A Reversal of a Costly Merger
Buffett, who helped orchestrate the 2015 merger between Kraft and Heinz, admitted in recent years that the deal has been among his biggest investment missteps. Berkshire Hathaway currently owns a 27.5% stake in Kraft Heinz, valued at about $8.9 billion. Despite early gains after the merger, the company’s share price has plunged nearly 70% since 2015, eroding much of Berkshire’s original $24 billion investment.
The legendary investor also criticized the estimated $300 million in additional costs the split will generate, arguing it will do little to solve Kraft Heinz’s fundamental challenges. “It certainly didn’t turn out to be a brilliant idea to put them together, but I don’t think taking it apart will fix it,” Buffett noted.
Unusual Criticism From Berkshire
Berkshire Hathaway rarely comments on the management decisions of its portfolio companies, making this rebuke notable. CEO-designate Greg Abel reportedly voiced concerns directly to Kraft Heinz leadership before the decision was finalized. Buffett also signaled Berkshire could consider reducing its stake, though he stressed any sale would be done in the best interest of all shareholders.
Market Reaction and Broader Industry Concerns
Kraft Heinz shares fell as much as 7.6% following the announcement before recovering to close 2.4% lower for the week. Analysts and financial commentators have echoed Buffett’s concerns, with the Financial Times and Reuters criticizing the company’s reliance on cost-cutting instead of adapting to changing consumer tastes.
Also Read: “Don’t Bet Against the Dollar”: Goldman Sachs Warns of Painful Fallout for Short Sellers
For Buffett, the Kraft Heinz saga underscores the risks of large-scale food industry consolidations. While the billionaire investor has often stood by his long-term positions, this episode highlights a rare moment of open dissatisfaction. Whether Berkshire will hold or sell remains uncertain, but the split adds fresh pressure to an already struggling brand.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
