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Berkshire Won't Alter Kraft Heinz Stake With Split Halted
Food Company to Focus on New Products, Lower Prices
Berkshire Hathaway Inc. CEO Greg Abel said the conglomerate has no immediate plans to alter its stake in Kraft Heinz Co. after the food company paused its plans to split in two.
Kraft Heinz CEO Steve Cahillane surprised investorslast monthwhen he announced he would suspend that work and would instead invest $600 million on developing new products and lowering some prices.
The move marked another twist in a saga that started roughly a decade ago when Kraft Heinz completed a $46 billion merger spearheaded by Berkshire’s former CEO Warren Buffett. The deal hasn’t delivered for investors, with the stock plummeting since then.
But Kraft Heinz’s plans to split had been a disappointment for Berkshire, whichfiled a registration statement in Januarythat said the firm was seeking to sell its remaining 28% stake in the packaged foods company.
Cahillane’s latest move “was absolutely the right approach,” Abel said in an interview with CNBC. “We filed our registration statement really to be in a place that if we ever did sell, we’d be able to. But it’s not that we’re going to take any immediate action currently.”
