Warren Buffett said Tuesday he is “disappointed” in Kraft Heinz’s decision to split, a move that unwinds much of the 2015 mega-merger he helped orchestrate. Shares of the food giant fell more than 5% following his remarks on CNBC.
Buffett’s Berkshire Hathaway remains Kraft Heinz’s largest shareholder, holding a 27.5% stake it has not touched since the merger. “The merger didn’t turn out to be a brilliant idea, but I don’t think breaking the company apart will solve its problems,” Buffett told CNBC’s Becky Quick, News.Az reports, citing foreign media.
The split will create two separate companies: one focused on sauces, spreads, and shelf-stable meals, and another centered on North American staples like Oscar Mayer, Kraft Singles, and Lunchables.
Kraft Heinz, backed by Berkshire and private equity firm 3G Capital in 2015, has struggled in recent years as health-conscious shoppers moved away from packaged foods. Shares have lost nearly 70% of their value since the merger closed, dragging its market capitalization down to about $33 billion.
Buffett acknowledged that Berkshire overpaid for Kraft and reiterated that the firm will act in shareholders’ best interest. However, he stressed Berkshire would only consider selling its stake if other investors receive equal terms.
Greg Abel, Buffett’s successor at Berkshire, also expressed disappointment with Kraft Heinz’s direction. The company did not immediately respond to a request for comment.
