When it comes to ketchup and mac and cheese, Warren Buffett might be feeling a bit of regret regarding his investment choices.
In a recent appearance on CNBC’s *Scoobox*, Buffett expressed his disappointment with Kraft Heinz after he had advocated for the merger back in 2015.
Even though Buffett pushed for the merger, the companies have decided to part ways. Even more frustrating for him is that he believes shareholders didn’t get to vote on the matter.
Buffett’s Berkshire Hathaway owns a 27.5% stake in Kraft Heinz, valued around $8.9 billion, making it the largest shareholder. If shareholders had a vote, perhaps the split wouldn’t have happened.
Buffett noted that Greg Abel, the incoming CEO of Berkshire Hathaway, made his discontent with the company’s plans clear before the final decision to split was reached.
It’s quite unusual to hear Buffett criticize one of his investments or its management.
The announcement of the split led to a 7.6% drop in Kraft Heinz’s stock price. While there was a slight recovery later in the week, the stock still ended 2.4% lower than its price before the announcement.
It’s uncertain whether Buffett will offload any shares in Berkshire Hathaway, but he has indicated that this possibility remains open.
“We will do whatever we think is in Berkshire’s best interest,” he stated.
He clarified that Berkshire Hathaway is not considering selling its shares unless an interested buyer wants the entire company.
“If you’re approached to sell shares, you won’t accept a large bid unless it’s made to all Kraft Heinz shareholders,” Buffett explained.
He acknowledged that merging the companies may have been a miscalculation, but he’s skeptical that breaking them apart would solve underlying issues.
“It definitely wasn’t the best idea to merge them, but I don’t believe breaking them apart will fix anything,” he remarked.
In a 2019 interview with CNBC, he admitted he had “gone wrong in some ways with Kraft Heinz” and acknowledged overpaying for Kraft.
What the new identities of Kraft and Heinz will be post-split is still unknown.
They face challenges, including rising costs of food ingredients and a shift in consumer preferences toward healthier and more affordable snacks.
Since the merger in 2015, Kraft Heinz’s stock price has dropped by 69%.
