Warren Buffett Masterminded The Kraft Foods, HJ Heinz Merger A Decade Ago – Its Split Has ‘Disappointed’ The Oracle Of Omaha

Berkshire Hathaway Inc. (BRK) CEO Warren Buffett reportedly expressed his displeasure following the news of Kraft Heinz Co. (KHC) 's split into two independent companies.

Buffett said in an interview with CNBC that he is “disappointed” with the Kraft Heinz separation, which was announced earlier on Tuesday. Kraft Heinz said the separation is designed to maximize the capabilities of its brands while reducing complexity.

Kraft Heinz shares declined over 6% during Tuesday morning’s trade following Buffett’s comments. Retail sentiment on Stocktwits around the company was in the ‘extremely bullish’ territory.

Berkshire Hathaway is the single largest shareholder of Kraft Heinz, with a 27.5% stake in the multinational food giant. It has maintained its holdings since the 2015 merger that Buffett helped facilitate in partnership with Brazilian private equity firm 3G Capital.

While 3G Capital exited its investment in Kraft Heinz in 2023, Berkshire continued to hold onto it. Asked about his plans for Berkshire’s stake in the food giant, Buffett said the company will do whatever is in the best interests of the firm, according to the report. He added that Berkshire will not accept a block bid unless other Kraft Heinz shareholders also receive a similar offer.

Earlier on Tuesday, Kraft Heinz announced that while the names of the two proposed independent public companies have not yet been finalized, one of them will include Heinz, Philadelphia, and Kraft Mac & Cheese in its portfolio. The other company, it said, will include a portfolio of brands such as Oscar Mayer, Kraft Singles, and Lunchables.

Miguel Patricio, executive chairman of the Kraft Heinz board, explained that the company's existing structure makes capital allocation difficult. “By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value,” Patricio said.

KHC stock is down 14% year-to-date and 26% over the past 12 months.

Also See: Gold Price Rises As Investors Flock To Safe Haven Amid Growing Uncertainties: Analyst Predicts This Level If Conditions Deteriorate

For updates and corrections, email newsroom[at]stocktwits[dot]com.