Berkshire Hathaway’s Bright Future by Andrew Bary, Barron’s
Warren Buffett is coming off one of the biggest investment coups of his long career with the closing of the Kraft Foods’ purchase of Heinz Holdings earlier this month.
Buffett’s Berkshire Hathaway invested $4.25 billion for a 50% equity stake in the $23 billion leveraged buyout of Heinz two years ago, along with a partner, Brazil’s 3G Capital. Berkshire made a second $5 billion equity investment with 3G when Kraft unveiled its deal for the ketchup maker in March. Berkshire Hathaway now is sitting on a 25% stake in the new Kraft Heinz -- some 326 million shares -- worth $25 billion based on Kraft’s recent share price of $77, resulting in a gain of almost $16 billion. That’s a stunning profit in just two years. (3G has a similar gain.)