By Jonathan Stempel and Jessica DiNapoli
Jan 20 (Reuters) – Berkshire Hathaway may shed its 27.5% stake in Kraft Heinz, according to a regulatory filing, and exit a more than decade-old investment that did not work out for the conglomerate’s Chairman Warren Buffett.
Kraft Heinz, whose products include Heinz ketchup and Oscar Mayer meats, on Tuesday filed a prospectus supplement with the U.S. Securities and Exchange Commission “to register the potential resale” by Berkshire of its 325.4 million share stake.
Berkshire is by far the largest shareholder of Kraft Heinz, whose merger it helped engineer in 2015 with Brazilian private equity firm 3G Capital. That firm divested its Kraft Heinz stake in 2023.
The combination of the former Kraft Foods and H.J. Heinz proved disappointing, and the combined company said in September it would split in two later this year.
Buffett told CNBC at the time that he and Greg Abel, then a Berkshire vice chairman and now its chief executive, disapproved of the split.
Kraft Heinz shares closed up 23 cents at $23.76 on Tuesday, making Berkshire’s stake worth about $7.7 billion. The shares fell 4.9% to $22.59 in after-hours trading following the filing of the prospectus supplement.
Berkshire did not immediately respond to a request for comment.
The Omaha, Nebraska-based conglomerate wrote down its Kraft Heinz investment by $3.76 billion in August, on top of a $3 billion writedown in 2019.
In a statement, Kraft Heinz said: “Our focus continues to be on maximizing long-term value for our business and for all shareholders.”
Kraft Heinz, which has offices in Chicago and Pittsburgh, has struggled following years of cost-cutting and underinvestment, while fending off competition from healthier and supermarket-branded alternatives.
It is among the worst-performing companies in the U.S. food sector, where sales have slowed as consumers pull back on spending following years of price hikes.
Kraft Heinz installed Steve Cahillane as its new CEO on January 1, the same day Abel became Berkshire’s chief.
Cahillane was previously CEO of the former Kellogg cereal and snack maker, which also split into separate companies. Both were later acquired.
(Reporting by Jonathan Stempel in New York; Editing by Jamie Freed)
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