Warren Buffett Furious Over Kraft Heinz Split Without Shareholder Vote – Here’s Why (2025 Update)
- Why Is Warren Buffett So Upset About the Kraft Heinz Split?
- The Costly Legacy of the Kraft-Heinz Merger
- What Are the Immediate Financial Consequences?
- Could Berkshire Hathaway Dump Its Kraft Heinz Stake?
- How Does This Affect Buffett’s Broader Investment Strategy?
- What’s Next for Kraft Heinz Investors?
- Warren Buffett’s Investment Philosophy Under Scrutiny
- Frequently Asked Questions
Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, is publicly expressing his frustration with Kraft Heinz's controversial decision to split into two separate companies without consulting shareholders. The move, announced in 2025, reverses the 2015 merger Buffett personally championed – now considered one of his worst investments. With Berkshire holding a 27.5% stake worth $8.9 billion, Buffett's disapproval carries significant weight. The split comes with $300 million in restructuring costs and follows years of declining stock performance, raising questions about the company's leadership and strategic direction.
Why Is Warren Buffett So Upset About the Kraft Heinz Split?
Buffett’s frustration stems from two key issues: the lack of shareholder voting rights and the questionable financial logic behind the split. In a private call with CNBC’s Becky Quick, he revealed that Berkshire’s next CEO, Greg Abel, had already warned Kraft Heinz executives about their opposition before the decision was finalized. "Certainly, merging them wasn’t a brilliant idea," Buffett admitted, "but I don’t think tearing them apart will solve anything either." The market reacted poorly to the news, with Kraft Heinz shares dropping 7.6% initially before closing the week down 2.4%.
The Costly Legacy of the Kraft-Heinz Merger
The 2015 merger between Kraft and Heinz was a joint venture between Berkshire Hathaway and Brazil’s 3G Capital, initially valued at $24 billion. While the stake briefly peaked at $30 billion in 2016, it has since plummeted, stagnating around $10 billion since 2020. Berkshire’s original $9.8 billion investment is now underwater by $1 billion, following multiple write-downs including a $3.8 billion adjustment last quarter alone. The split proposal appears to be an attempt to salvage value from what Buffett himself calls a "disappointing" investment.
What Are the Immediate Financial Consequences?
The separation comes with substantial costs – $300 million in overhead expenses that Buffett argues could be better spent elsewhere. More concerning is the timing: the split occurs as Kraft Heinz struggles with years of cost-cutting measures that critics say stifled innovation. The Financial Times recently noted the company failed to adapt to changing consumer preferences, calling the split "neither bold nor smart" but rather a distraction from poor performance.
Could Berkshire Hathaway Dump Its Kraft Heinz Stake?
While Buffett hasn’t confirmed any sell-off plans, he notably refused to rule it out, stating Berkshire will "do what we think is best for the company." Any large-scale sale WOULD trigger SEC disclosure requirements within two business days, potentially sparking broader investor panic. The situation remains fluid, with Buffett emphasizing that Berkshire wouldn’t accept any partial buyout offers unless extended to all shareholders.
How Does This Affect Buffett’s Broader Investment Strategy?
Interestingly, Berkshire’s other major holdings appear stable. Its latest 13F filing shows significant positions in U.S., Japanese, and Hong Kong-listed companies, including Itochu and Mitsubishi in Tokyo. The Kraft Heinz debacle stands in stark contrast to these more successful investments, highlighting the rare misstep by the Oracle of Omaha.
What’s Next for Kraft Heinz Investors?
With two Berkshire board members recently resigning from Kraft Heinz’s board amid speculation about strategic changes, the pressure is mounting on management. The split, scheduled for next year, faces skepticism from major investors beyond just Buffett. Market analysts question whether separating the companies addresses the root causes of Kraft Heinz’s underperformance or merely creates two weaker entities.
Warren Buffett’s Investment Philosophy Under Scrutiny
This episode raises broader questions about Buffett’s traditional "buy and hold" approach in today’s rapidly changing consumer landscape. While his long-term strategy has produced legendary returns, the Kraft Heinz situation shows even the most seasoned investors can misjudge industry shifts. As Buffett himself might say, "It’s only when the tide goes out that you learn who’s been swimming naked."
Frequently Asked Questions
Why didn’t Kraft Heinz shareholders get to vote on the split?
Corporate governance rules didn’t require a shareholder vote for this particular decision, though Buffett believes major stakeholders like Berkshire should have been consulted given the strategic significance.
How much has Berkshire lost on Kraft Heinz overall?
Between write-downs and the current market valuation, Berkshire’s $9.8 billion investment is now worth about $8.9 billion – a $1 billion paper loss excluding dividends received.
What are the two new companies being formed?
Details remain unclear, but analysts speculate one entity will focus on shelf-stable grocery products while the other handles refrigerated and fresh items.
Could activist investors get involved?
Possible, though Buffett’s vocal opposition may deter some activists given his influence. The situation could change if the split fails to improve performance.
Has Buffett made worse investments than Kraft Heinz?
Few in terms of absolute dollar losses, though percentage-wise, his 1980s investment in US Air was more disastrous before eventually breaking even.
