Market Reaction
Kraft Heinz shares fell as much as 7.5% during Wednesday trading after news of the registration surfaced. The stock, now down roughly 70% from levels reached shortly after Kraft Foods Group combined with H.J. Heinz nine years ago, has been pressured by changing consumer preferences, elevated input costs and muted volume growth across its core brands.
Although steady dividend payments have partly offset Berkshire’s unrealized loss, the holding company recorded a $3.8 billion impairment charge in 2024 to reflect the reduced market value of its position. Kraft Heinz continues to generate significant cash flow, but analysts caution that sluggish U.S. demand and slower expansion in emerging markets may keep revenue growth subdued.
Strategic Context
Abel, who previously ran Berkshire’s sprawling energy operations, assumed the chief executive role in early 2025. Observers note that the Kraft Heinz position is one of only a handful of major investments that have not produced outsized gains for Berkshire, contrasting sharply with longstanding stakes in Apple, Coca-Cola and American Express. Removing or shrinking the holding would allow Abel to redeploy capital toward opportunities that align more closely with Berkshire’s current priorities.
Morningstar senior equity analyst Greggory Warren wrote in a client note that the timing of the filing suggests Abel hopes to “clean up” the equity book early in his tenure. The move, Warren added, also eliminates the incremental administrative work required to register shares at a later date should Berkshire decide to sell.
Kraft Heinz Restructuring Plan
The registration arrives as Kraft Heinz pursues its own strategic overhaul. Executives have proposed separating the company into two publicly traded entities: one housing global sauces, spreads and shelf-stable meals, and another focused on North American staples such as Oscar Mayer, Kraft Singles cheese slices and Lunchables snack kits. Management argues that a split would allow each enterprise to tailor marketing, innovation and capital allocation strategies to its distinct product categories and geographic footprints.
Some investors have questioned whether the breakup will create meaningful shareholder value. Warren Buffett recently commented that the 2015 combination of Kraft and Heinz did not achieve its intended synergy targets, and he expressed skepticism that reverse-engineering the transaction would address underlying brand and demand challenges. Still, Berkshire’s latest filing indicates that the holding company is prepared to reduce exposure whether or not the separation proceeds.
Role of 3G Capital
Berkshire partnered with Brazilian private-equity firm 3G Capital to engineer the 2015 merger, supplying roughly $10 billion in financing. While Berkshire maintained its position through years of volatility, 3G steadily trimmed its ownership and quietly exited in 2023. The private-equity group had helped craft an aggressive cost-cutting program that boosted margins shortly after the deal closed, but persistent sales declines later eroded those gains.
Next Reporting Milestones
Because the registration permits sales on the open market, subsequent changes in Berkshire’s position will likely appear in routine quarterly filings. The next Form 13F, detailing equity holdings as of March 31, is expected in mid-May. Unless Berkshire opts to announce transactions sooner, investors may not know the pace of any divestitures until that report is released.
Stifel analysts reiterated a hold rating and a $26 price target on Kraft Heinz following the registration news, citing the possibility that softer consumption patterns could persist. The firm noted that the filing alone does not mandate a sale and emphasized that Berkshire could remain a significant shareholder for an extended period.
Broader Portfolio Management
Berkshire’s decision to ready its Kraft Heinz shares for sale occurs as the conglomerate continues to balance sizable holdings in publicly traded companies with wholly owned subsidiaries such as Geico, BNSF Railway and Berkshire Hathaway Energy. Regulatory filings show that listed equities accounted for more than one-third of Berkshire’s $364 billion in cash and investments at year-end 2024.
In recent quarters, Berkshire has boosted positions in several Japanese trading companies and maintained a large stake in Apple, underscoring a selective approach to equity investments. The potential exit from Kraft Heinz would free at least $10 billion based on current market prices, giving Abel additional flexibility to pursue acquisitions or stock purchases that meet Berkshire’s long-standing valuation discipline.
Regulatory Framework
The registration statement was filed under Rule 415 of the Securities Act of 1933, allowing for so-called “shelf” offerings in which securities can be sold intermittently over a defined period. For background, the U.S. Securities and Exchange Commission requires companies to file such documents when they intend to make large volumes of shares available to the public, thereby ensuring disclosure of key information to potential buyers.
Whether Berkshire chooses to sell in blocks through underwritten offerings or through routine market transactions will depend on market conditions, tax considerations and internal capital needs. Neither Berkshire nor Kraft Heinz has provided a specific timetable.
The filing nevertheless signals a noteworthy shift for Buffett’s conglomerate. While the legendary investor has seldom reversed course on high-profile deals, the move suggests that leadership is prepared to unwind positions that no longer fit Berkshire’s evolving outlook, even when those investments carry the imprint of the company’s longtime architect.
Crédito da imagem: CNBC
