Kraft Heinz Decouples, Undoing 2015’s Monumental Merger
Kraft Heinz has announced its decision to bifurcate into two independent public entities, thereby undoing the $46 billion merger masterminded by Warren Buffett a decade ago. This split segregates the faster-growing brands such as Heinz ketchup and Philadelphia cream cheese from the slower-growing grocery items like Oscar Mayer and Lunchables.
The company identified complexity as a significant factor, with its current operations sprawling across 56 diverse product categories, thereby making effective capital allocation a challenge. The first company will concentrate on sauces, condiments, and spreads, boasting $15.4 billion in annual sales. In contrast, the second entity will manage North American grocery products, generating $10.4 billion in revenue.
Buffett expressed his disappointment with the split, confessing to CNBC that the merger “didn’t turn out to be a brilliant idea.” Following the announcement, Kraft Heinz shares plummeted by 7%. The transaction is slated to conclude in the second half of 2026, with both companies retaining their investment-grade credit ratings.
Source: CNBC