Wed, Mar. 25, 6:23 AM
- H.J. Heinz, owned by P-E firm 3G Capital and Berkshire Hathaway (BRK.A, BRK.B), and Kraft (NASDAQ:KRFT) have entered into a definitive merger agreement to create The Kraft Heinz Company, forming the third largest food and beverage company in North America.
- Heinz shareholders will own a 51% stake in the combined company, while Kraft shareholders will hold a 49% stake and receive a special cash dividend of $16.50 per share.
- Together the new company will have eight $1B+ brands and five brands between $500M-$1B.
- "I am delighted to play a part in bringing these two winning companies and their iconic brands together. This is my kind of transaction," said Berkshire Hathaway CEO Warren Buffett.
- 3G previously took Burger King private in 2010, bought Tim Hortons last year through the holding and teamed up with Berkshire Hathaway two years ago to buy Heinz for $23B.
- Kraft’s revenue last year was effectively flat at $18B and net profit fell 62% to $1B, due to higher commodity costs and big charges related to its post-employment benefit plans.
- Previously: Kraft now +16.5% on buyout report; MDLZ, CAG also gain (Mar. 24 2015)
- KRFT +15.8% premarket.
Tue, Mar. 24, 9:34 PM
- Kraft (NASDAQ:KRFT) finished AH trading at $71.44 following a WSJ report stating the company is in talks to sell itself to P-E firm 3G Capital. Mondelez (NASDAQ:MDLZ) rose 3.3% to $36.18, and ConAgra (NYSE:CAG) rose 1.9% to $35.27.
- The WSJ has added more details. Sources state a deal could be announced soon, and that 3G would use previously-acquired Heinz to make the purchase. It now calls buyout talks "advanced," and highlights 3G's track record of aggressively cutting costs at consumer companies it has acquired.
- The paper speculates Kraft "could be valued at well over $40 billion," given typical M&A premiums. The food/beverage giant closed AH with a $42.6B market cap.
Tue, Mar. 24, 7:12 PM| 35 Comments
Mon, Mar. 2, 7:54 AM
- RBC Capital Markets thinks Mondelez International (NASDAQ:MDLZ), Kellogg (NYSE:K), or Kraft Foods (NASDAQ:KRFT) would make a logical acquisition for Berkshire Hathaway after reading Warren Buffett's annual shareholder letter.
- Buffett was very active in the food sector previously as a backer of 3G in the acquisitions of Heinz and in the Tim Hortons-Burger King combination.
- Previously: Buffett, Munger talk succession and more in annual letters (Feb. 28 2015)
- Previously: Buffett talks to CNBC after annual letter
Sat, Feb. 14, 10:13 AM
- Craft soda is starting to become a trend to watch closely, according to industry insiders.
- Though still accounting for only ~1% of the total U.S. soda market, major retail chains have increasingly been willing to bet on local craft brands in store aisles.
- The craft craze is old news for the beer industry where coming-of-age millennials buy craft/local beers at a 50% higher rate than brand-loyal older generations. Fading stars such as Budweiser and Bud Light are testament to the impact of the millennial paradigm.
- The craft influence in coffee hasn't been lost on Starbucks which has strategically deployed trucks on college campuses in an effort to win over students.
- Despite the progressive reputation of Starbucks, analysts think new upstarts such as Craft (subscription) and Cups (app) have a shot of gaining influence with the Indie-minded millennial crowd on "customization" and pricing.
- What to watch: An increase in M&A activity in the beverage sector is expected as major companies strategically pick off more local craft brands to incubate.
- Craft beer watch: BUD, OTCPK:SBMRY, TAP, OTCQX:HEINY, SAM, BREW, STZ, OTC:BIBLF, OTCPK:BRBMF.
- Craft coffee watch: GMCR, SBUX, JVA, SJM, KRFT, DNKN, QSR, MCD.
- Craft soda watch: PEP, KO, MNST, COT, DPS, OTCQB:JSDA, REED, SODA, FIZZ.
Wed, Jan. 7, 10:59 AM
- Most investment firms weighing in think PepsiCo (PEP +2.3%) is too big of a target for 3G to land as they dissect the WSJ report on interest in the multinational.
- Campbell Soup (CPB +4.3%) is trading like it's viable 3G target, while Kellogg K, and Kraft Food Group (KRFT +2.1%) have also been bandied around by retail analysts as possibilities.
- Outside of the food sector, Bloomberg's Tara Lachappelle notes Colgate-Palmolive (CL +0.2%) makes sense for 3G.
Jun. 12, 2014, 2:17 PM
- After missing out on Hillshire Brands and Smithfield Foods, Brazilian food giant JBS S.A. (JBSAY) has a narrower list of acquisition targets, according to Deutsche Bank.
- Oscar Meyer (KRFT) and Hormel Foods (HRL) are two big-target options for JBS, while Maple Leaf Foods MFI and Sanderson Farms SAFM are on the lighter side.
May. 27, 2014, 7:28 AM
- A $6.4B offer by Pilgrim Pride's (PPC) to buy Hillshire Brands (HSH) could rattle the food sector.
- For starters, the deal could spoil Hillshire's offer on the table to buy Pinnacle Foods (PF).
- The quick analyst take on a PPC-HSH combination is favorable with the companies focused in different areas (chicken vs. packaged meat) which could lead to easy access to new distribution channels.
- Premarket: HSH +22.9% to $45.49, PF -5.3% to $31.50.
- Also on merger watch in the food sector: THS, SJM, GIS, KRFT, CPB, ADM, BGS, RAH, HAIN, K CAG
May. 12, 2014, 7:13 AM
- A merger between Hillshire Brands and Pinnacle Foods could kickstart the consolidation frenzy in the food industry analysts have been forecasting.
- The sector has been tapped to see a high rate of mergers and buyouts due to the significant synergies that could be unleashed through combinations.
- On watch: THS, SJM, GIS, KRFT, CPB, ADM, BGS, RAH, HAIN, K, CAG
Oct. 2, 2013, 3:11 AM
- Archer Daniels Midland (ADM) is reportedly close to selling its cocoa business to Cargill in a deal that could be worth up to $2B.
- The divestiture would further strengthen ADM's shift towards the grains industry as it completes its $3B acquisition of GrainCorp. The transaction would also reduce ADM's exposure to the lower profitability that's affecting the cocoa sector.
- The deal would create a global price-setting giant to rival Zurich-based Barry Callebaut (BYCBF.PK), the world's biggest producer of industrial chocolate products. Cargill and Barry Callebaut would account for over 50% of world capacity.
- Food producers that could be affected include MDLZ, HSY, RMCF, KRFT, NSRGY.PK.
- ETF: NIB
Feb. 14, 2013, 8:04 AM
Oct. 11, 2012, 6:12 PMKraft Foods (KRFT) has put its Breakstone dairy business up for sale, which could fetch ~$400M, and Mexico's Grupo Lala may be interested, Bloomberg reports. Analysts say such a sale could mark the start of a KRFT focus on its power brands; expect "ongoing pruning, especially if there is a slowdown and their leverage starts to get too high." | Comment!
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Kraft Foods Group Inc is a consumer packaged food & beverage company. It manufactures & markets food & beverage products, including cheese, meats, refreshment beverages, packaged dinners, refrigerated meals, snack nuts, & other grocery products.
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