By Dr. David Kass

According to Warren Buffett on CNBC, the Kraft Heinz merger will result in Berkshire Hathaway owning 320 million shares of the combined company when it is expected to close during the second half of 2015. At Kraft’s (KRFT) closing price yesterday of $83 per share, after a $16.50 cash dividend to current KRFT shareholders, the resulting price of $66.50 implies a valuation of about $21 billion for Berkshire’s holding in this company. This will represent Berkshire’s second largest common stock investment, trailing only Wells Fargo ($26 billion). Since Berkshire will own 26% of Kraft Heinz, the new company is being valued at about $80 billion.

Kraft Heinz Is Berkshire Hathaway’s Second Largest Common Stock Investment
Source: Wikimedia Commons