Warren Buffett's company took Kraft Heinz off its subsidiary list weeks before board exit and $5 billion writedown

Core Insights - Berkshire Hathaway has removed Kraft Heinz from its list of operating companies, indicating a significant shift in its investment strategy [1][6] - The company recorded a $5 billion impairment loss on its Kraft position, reducing its carrying value to $8.4 billion, reflecting a decline in Kraft's fair value [2][3] - Kraft Heinz is undergoing a strategic split into two main businesses, focusing on sauces and North American staples, which may impact its future performance [10] Investment and Financial Analysis - Berkshire holds a 27% stake in Kraft Heinz, accounting for it using the equity method, which adjusts the carrying value based on Kraft's profits and losses [2] - The decision to write down the investment was influenced by the decline in fair value, Kraft's operating results, and the departure of Berkshire's board representatives [3][6] - The unrealized loss on the investment was deemed "other-than-temporary," suggesting a long-term concern regarding Kraft's financial health [6] Historical Context - Berkshire Hathaway, in partnership with 3G Capital, acquired Heinz for approximately $23 billion in 2013 and later merged it with Kraft in a $40 billion deal [11] - The combined entity has faced numerous challenges, including layoffs, management changes, and a decline in net revenues due to shifting consumer preferences [11] - A finance professor described the merger of Kraft and Heinz as a "rare mistake" for Warren Buffett, highlighting the difficulties faced by the company since the merger [12]