Kraft Heinz(US:KHC) Zhi Tong Cai Jing·2025-11-17 13:24Core Viewpoint - Kraft Heinz's plan to split into two independent publicly traded companies has disappointed Warren Buffett, but Berkshire Hathaway has not reduced its stake in Kraft Heinz, maintaining a 27.5% ownership [1][2] Group 1: Company Split Details - Kraft Heinz's board approved a spin-off plan to create two separate companies, one focusing on global flavor enhancement with projected sales of approximately $15.4 billion in 2024, and the other on North American staples with estimated net sales of about $10.4 billion [1] - The split aims to simplify operations, allowing each new entity to focus on its growth objectives and improve capital allocation while retaining necessary scale for competitiveness [1] Group 2: Market Reactions and Analyst Insights - Wall Street views Kraft Heinz's split as a calculated move, anticipating that Berkshire will ultimately accept the plan despite Buffett's public criticism regarding the lack of shareholder consultation [2] - Analysts suggest that both new entities must demonstrate their ability to operate independently and maintain brand strength in a rapidly changing food industry, with expectations for the global flavor enhancement company to achieve over 3% organic sales growth in the long term [2] Group 3: Historical Context and Performance - Buffett has acknowledged past mistakes in the investment in Kraft Heinz, including overpaying during the acquisition, which began in 2013 with a total deal value of $28 billion [3] - Kraft Heinz's stock has declined nearly 16% this year, with a significant drop of over 62% from its peak of $65.87 in 2017, reflecting challenges in adapting to changing consumer preferences for healthier food options [3]