Sector News

Warren Buffett Throws Cold Water on Mondelez Deal Talk

August 11, 2015
Food & Drink
Warren Buffett threw cold water Monday on the idea that he’d be involved in a deal for Mondelez International Inc.MDLZ +0.65% any time soon.
 
Mr. Buffett’s Berkshire Hathaway Inc.BRKA -0.08% revealed Monday that it agreed to buy Precision Castparts Corp.PCP +19.10% for about $32 billion, in what would be the conglomerate’s largest takeover ever.
 
The deal also represents one of the larger deals in the most active year for M&A since the peak year of 2007. It comes just months after the roughly $50 billion merger of Kraft Foods Group and H.J. Heinz, half of which was owned by Berkshire.
 
Appearing on CNBC after the Precision Castparts deal was announced, Mr. Buffett played down speculation that Kraft Heinz Co.KHC +0.44% could buy Mondelez, the snacks giant that was once called Kraft Foods Inc.
 
Last week, high-profile activist investor William Ackman unveiled a $5.5 billion stake in Mondelez, a giant bet that the maker of Oreo cookies and Ritz crackers will become the biggest target in a wave of consolidation reshaping the food industry. Kraft Heinz Co. was seen as a potential suitor.
 
Mr. Buffett said a deal with Mondelez, or any big food company, is unlikely in the near term. And he suggested that the pricetag that would be required to buy the company was prohibitive.
 
“At Kraft Heinz, we have our work cut out for us for a couple of years,” he said. “Frankly, most of the food companies sell at prices that it would be very hard for us to make a deal even if we had done all the work needed at Kraft Heinz.”
 
Those factors were among the reasons we listed last week in this space when we noted that it was premature to assume that a tie-up between the two was a done deal. In addition, we noted that Mr. Buffett hasn’t always been a fan of the way the company’s been run.
 
Traders are taking note of Mr. Buffett’s comments. Shares of Mondelez are down 2.4% to $44.99 in pre-market trading. Kraft Heinz is up 1.1% to $79.32.
 
By Chelsey Delaney and Erik Holm
 

comments closed

Related News

May 21, 2022

Cécile Béliot becomes Bel Group CEO

Food & Drink

Cécile Béliot has assumed the role of Bel Group chief executive officer, following the decision to separate the roles of chairman and CEO. The separation of the functions will enable Bel Group to develop in three areas of healthy snacking. Meanwhile, the company’s former CEO, Antoine Fiévet, has had his mandate renewed as chairman of the board.

May 21, 2022

“Corporate greed and dereliction of duty”: FDA commissioner slammed over infant formula shortage

Food & Drink

US Food and Drug Administration (FDA) Commissioner Dr. Robert Califf was grilled by lawmakers during a House Appropriations subcommittee hearing, where he was slammed over the agency’s handling of the escalating infant formula shortage.

May 21, 2022

Sweegen hails antioxidants and bitter blocking tech a turning point for sugar reduction and healthy aging

Food & Drink

Sweegen is ramping up its efforts to reduce sugar across F&B applications while simultaneously tapping into the benefits of using antioxidants and bitter blocking technology. Speaking to FoodIngredientsFirst, Casey McCormick, vice president of global innovation at Sweegen, says product developers can find a broad range of solutions in Sweegen’s nature-based sweetener systems as brands elevate better-for-you foods.