Kraft Heinz announced plans to split into two separately traded companies, reversing its 2015 megamerger, which was orchestrated by billionaire investor Warren Buffett. Justin Sullivan | Getty Images News | Getty ImagesBig Food is slimming down. As both consumers and regulators push back against ultra-processed foods, the companies that make them have been splitting up or divesting iconic brands. Last year, Unilever spun off its ice cream business into The Magnum Ice Cream Company. Kraft Heinz is preparing ...

Core Viewpoint - The recent SEC filing by Kraft Heinz indicates a potential divestiture of Berkshire Hathaway's entire 27.5% stake, suggesting a possible shift in strategy under new CEO Greg Abel following Warren Buffett's departure [2][10]. Group 1: Berkshire Hathaway's Investment in Kraft Heinz - Berkshire Hathaway's involvement with Kraft Heinz began in 2013 with a $23 billion acquisition of H.J. Heinz, followed by a $46 billion merger with Kraft Foods in 2015, creating a combined entity with well-known brands [3][4]. - The merger aimed to achieve cost synergies and leverage brand loyalty, resulting in Berkshire holding a significant equity position of 27.5% [4]. Group 2: Challenges and Write-downs - By 2019, issues with the merger became apparent, leading Buffett to admit that Berkshire overpaid for Kraft Heinz, with a valuation that required unrealistic returns [5]. - Kraft Heinz announced a $15.4 billion write-down on its brands, causing a 27% stock drop, and Berkshire recorded a $3 billion write-down in the same year, followed by another $3.76 billion write-down in August [5][6]. Group 3: Potential Shift Under Greg Abel - The SEC filing raises questions about whether Abel's leadership signifies a departure from Buffett's long-term holding strategy, as Kraft Heinz shares fell 7.5% post-announcement, valuing Berkshire's stake at approximately $7.7 billion [7][10]. - Kraft Heinz's planned split into two independent entities by 2026 alters the original investment thesis, prompting considerations for a potential sale under Abel [8][9]. Group 4: Strategic Implications - The restructuring of Kraft Heinz into two distinct businesses may create up to $300 million in "dis-synergies," diverging from the original vision of a unified food powerhouse [9]. - A potential divestiture could align with Buffett's principle of adapting to new realities, allowing Berkshire to prioritize capital allocation and seek higher-return opportunities [10][11].

Core Insights - Warren Buffett announced his intention to step down as CEO of Berkshire Hathaway by the end of 2025, although he will continue to provide guidance on investment decisions [1] - Berkshire Hathaway has been a net seller of equities, selling over $24 billion in stocks in the first nine months of 2025, following a more aggressive $143 billion in 2024, resulting in a cash reserve of $354 billion [2][3] Berkshire Hathaway's Investment Strategy - Despite being a net seller for 12 consecutive quarters, Buffett made a notable $4.3 billion investment in Alphabet Inc. in 2025, indicating a cautious approach towards future economic conditions [3] - The company continues to focus on acquiring high-quality dividend-paying stocks, with four identified as potential total return opportunities for 2026 and beyond [4] Company Highlights Chevron - Chevron Corp. offers a 4.58% dividend, which was increased by 5% earlier in the year, and has a strong credit rating of AA [7] - The company completed a $53 billion acquisition of Hess, which positively impacted its third-quarter earnings, reporting $1.85 earnings per share and $49.73 billion in revenue, exceeding analyst expectations [9] Coca-Cola - Coca-Cola Co. maintains a 2.86% dividend and is a long-term holding for Buffett, with ownership of 400 million shares [10] - The company is the largest beverage provider globally, serving over 1.9 billion servings daily across more than 200 countries [11] Kraft Heinz - Kraft Heinz Co. pays a substantial 6.63% dividend and is North America's third-largest food and beverage company [12] - The company announced a split into two independent companies, expected to unlock value and drive growth, with the separation anticipated in the second half of 2026 [14] Kroger - Kroger Co. offers a 2.15% dividend and operates a variety of retail formats across the U.S., including supermarkets and multi-department stores [16] - The company has an Outperform rating with a target price of $77, indicating strong market confidence [18]

Key Points Kraft Heinz is now planning to split into two. Even Warren Buffett has called the stock a disappointment. Costco presents a better option in the consumer staples sector. 10 stocks we like better than Costco Wholesale › Few stocks have been as big of a disappointment as Kraft Heinz (NASDAQ: KHC) over the last decade. The 2015 merger of the eponymous food giants was engineered by Warren Buffett's Berkshire Hathaway and Brazilian investment firm 3G Capital, but Buffett has called it a d ...

Core Viewpoint - The article discusses high-yield stocks within the Nasdaq-100 index, highlighting three companies that offer significant dividends but also face various challenges that may affect their attractiveness as investments. Group 1: Kraft Heinz - Kraft Heinz has the highest dividend yield in the Nasdaq-100 at 6.5% [3] - The company has faced significant challenges, including over $15 billion in writedowns since its merger, indicating struggles in the processed food sector [4] - Kraft Heinz plans to split into two companies in the second half of next year, but this move has been criticized as not addressing the underlying business issues [6][7] Group 2: Comcast - Comcast offers a dividend yield of 4.4% and operates in various sectors including cable, broadband, and media [8] - The company reported a 2.7% decline in revenue to $31.2 billion in the third quarter, with flat adjusted earnings per share at $1.12 [9] - Comcast's growth prospects are limited due to a declining cable business and mature broadband market, making it less attractive for investors [11] Group 3: Paychex - Paychex has a dividend yield of 3.8% and provides cloud-based software for back-office functions [12] - The company reported a 17% revenue growth to $1.54 billion, largely driven by its acquisition of Paycor [13] - Despite the maturity of payroll processing, Paychex expects adjusted earnings-per-share growth of 9%-11% for the current fiscal year, making it a favorable option for investors seeking tech exposure and dividends [15]

Core Insights - Kraft Heinz (KHC) is undergoing significant leadership changes as it prepares for a planned split into two independent companies next year [1][4]. Leadership Changes - Steve Cahillane, former CEO of Kellanova, will become the CEO of Kraft Heinz effective January 1, and will also join the board and lead the new "Global Taste Elevation Co." [2][8]. - Current CEO Carlos Abrams-Rivera will step down on January 1 but will remain as an advisor until early March; the company will conduct a global search for a new leader for the "North American Grocery Co." [3][4]. Company Restructuring - The split will create two entities: "Global Taste Elevation Co." will include major brands such as Heinz ketchup and Philadelphia cream cheese, while "North American Grocery Co." will encompass brands like Oscar Mayer and Kraft Singles [4][8]. - This restructuring is seen as a reset that could significantly impact the company's future value and investor expectations [4]. Industry Context - The leadership changes at Kraft Heinz reflect a broader trend in the consumer-focused business sector, with other companies like Walmart and Coca-Cola also announcing CEO changes [5].

Core Points - Kraft Heinz Co. announced that Steve Cahillane, former CEO of Kellanova, will become the new CEO effective January 1, succeeding Carlos Abrams-Rivera, who will remain as an advisor until March to ensure a smooth transition [1][4][9] - The company plans to split into two independent publicly traded entities, with Cahillane leading the Global Taste Elevation business, which will manage brands such as Heinz, Philadelphia, and Kraft Mac & Cheese [2][5] - The separation is projected to occur in the second half of 2026, aiming to create more focused organizations that can enhance brand management and profitability [4][5] Leadership Transition - Steve Cahillane's appointment is seen as a strategic move to leverage his experience, having successfully led Kellogg through a similar separation and brand expansion [9][10] - Carlos Abrams-Rivera will assist in the transition, ensuring continuity in leadership during this critical period [1] Business Strategy - The split will result in two distinct companies: Global Taste Elevation and North American Grocery, the latter overseeing brands like Oscar Mayer and Kraft Singles [5] - The goal of the separation is to reduce complexity and enhance the ability of each entity to compete effectively in the market [4][7]

Core Viewpoint - Kraft Heinz is planning to split into two separately traded companies, reversing its 2015 merger orchestrated by Warren Buffett [1] Group 1: Leadership Changes - Steve Cahillane, former CEO of Kellanova, will become the CEO of Kraft Heinz on January 1, leading the company post-split [2] - Cahillane previously oversaw Kellogg's breakup in 2023, which separated its North American cereal business from its snacking unit [3] - Carlos Abrams-Rivera, the outgoing CEO, will transition to an advisory role until March 6 [3] Group 2: Company Structure Post-Split - The new entity, Global Taste Elevation, will include high-growth brands such as Heinz, Philadelphia, and Kraft Mac & Cheese [2] - Kraft Heinz is searching for a new CEO to lead the North American Grocery segment, which includes brands like Oscar Mayer and Kraft Singles [4] - John Cahill will succeed Miguel Patricio as chair of the board during this transition [4] Group 3: Timeline and Projections - The separation of Kraft Heinz into two publicly traded companies is projected to occur in the second half of 2026 [4]

Core Insights - The article discusses the leadership transition at Kraft Heinz, with Steve Cahillane appointed as CEO ahead of the company's planned split in 2026 [4][7] - The split aims to create two focused entities, reversing much of the $46 billion merger that formed Kraft Heinz a decade ago [5] Company Overview - Kraft Heinz has been facing challenges with declining sales as consumers shift away from processed foods and inflation affects spending habits [4] - The company is actively expanding key brands into new categories, such as introducing Philadelphia into cream cheese frosting and Crystal Light into hard seltzer [5] Leadership Transition - Steve Cahillane, previously CEO of Kellanova, will lead the new division called Global Taste Elevation, which is projected to generate $15 billion in sales [6][7] - The Global Taste Elevation division will focus on higher-growth brands including Heinz, Philadelphia, and Kraft Mac & Cheese [7] - Current CEO Carlos Abrams-Rivera will step down but remain as an adviser until March 6, 2026 [7]

Core Insights - Kellanova has been acquired by Mars, leading to the expected delisting of K stock, prompting former K stock owners to consider investing in Kraft Heinz (KHC) as an alternative [1] Company Overview - Kraft Heinz owns and markets several well-known brands, including Kraft and Heinz, with a market capitalization of $28.7 billion [2] Financial Performance - In Q3, KHC's sales decreased to $6.237 billion from $6.383 billion year-over-year, while operating cash flow increased to $3.09 billion from $2.8 billion [3] - The company plans to split into two focused entities, with projected EBITDA of approximately $4 billion and $2.3 billion for each entity in 2024 [4] Strategic Moves - The split aims to enhance focus and efficiency for the two new companies, which will feature different brand portfolios [5] - Berkshire Hathaway holds a 27.5% stake in KHC, but there are concerns about potential share sales that could negatively impact KHC stock [5][6] Dividend Information - KHC offers a high dividend yield of about 6.5%, although the company has not fully committed to maintaining this yield post-split [7]