Warren Buffett criticized the planned break-up of The Kraft Heinz Company (NASDAQ:KHC) on Tuesday, saying he is "disappointed" with a move that effectively unravels the 2015 merger he helped engineer.
Shares of the packaged-food giant slipped following his remarks.
Buffett told CNBC that while the merger fell short of expectations, he does not believe splitting the company will solve its challenges.
- KHC is encountering selling pressure. See the full breakdown here.
The Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK) chief, whose firm owns about 27.5% of Kraft Heinz, said the deal "didn't turn out to be a brilliant idea" and added that dismantling the company is unlikely to be a cure-all. Buffett also noted that successor Greg Abel conveyed Berkshire's displeasure directly to the food maker.
Also Read: Kraft Heinz Sells Italian Infant Food Business
What Kraft Heinz Plans
Kraft Heinz will separate into two stand-alone, publicly traded businesses: Global Taste Elevation Co.—focused on sauces, spreads, seasonings, and shelf-stable meals—and North American Grocery Co., a domestic staples portfolio.
The global unit includes brands such as Heinz, Philadelphia and Kraft Mac & Cheese and generated about $15.4 billion in 2024 sales, while the North American unit, led by CEO Carlos Abrams-Rivera, posted around $10.4 billion.
The board expects the tax-free spin to be completed in the second half of 2026, with investment-grade capital structures and an aggregate dividend maintained.
Company leaders argue that narrowing focus will cut complexity and speed decision-making after a years-long period of underperformance. Miguel Patricio will serve as executive chair through the transition, and a separation committee led by John Cahill will oversee execution.
Kraft Heinz shares slipped after Buffett's comments as investors weighed the Oracle of Omaha's skepticism against management's case for value creation.
Berkshire has previously acknowledged impairments tied to the investment, adding to scrutiny over whether a split can unlock brand potential and improve margins.
KHC Price Action: Kraft Heinz shares were down 6.58% at $26.12 at the time of publication on Tuesday. The stock is trading near its 52-week low of $25.44, according to Benzinga Pro data.
Read More:
Image created using artificial intelligence via Midjourney.
