Buffett expressed regret over the Kraft Heinz split.

I really can't believe that this guy personally facilitated the merger ten years ago, and now he is watching it fall apart. According to CNBC, Buffett expressed on Tuesday that he was "disappointed" with the Kraft Heinz split, even stating that the original merger was "not a smart idea". What's more, he believes that this split does not fundamentally solve the real issues.

This split has cleanly divided Kraft Heinz into two parts. One part will manage sauces, spreads, and shelf-stable foods, while the other will continue to be responsible for well-known American brands, such as Kraft Singles, Lunchables, and Oscar Mayer.

After announcing the split earlier on Tuesday, Old Ba expressed the above views in an interview with Becky Quick, resulting in the stock price plummeting over 7% on the spot. It's indeed a shocking statement that stunned the market.

Berkshire remains stagnant, Kraft Heinz collapses.

Strangely, since the merger in 2015, Buffett has maintained a 27.5% stake in Berkshire Hathaway without any change. For ten years, he has neither reduced nor increased his holdings, which is quite different from the enthusiasm he showed when he initially teamed up with 3G Capital to form Kraft Heinz.

Now, 3G has quietly exited in 2023, leaving only Buffett and his successor Greg Abel lonely guarding this investment. Abel also expressed disappointment about Kraft Heinz's current situation, and I can't help but laugh at this scene. What exactly are these two feeling sorry about?

The merger of Kraft Heinz has been nothing short of a disaster. Since 2015, the stock price has plummeted nearly 70%, and its market value has shrunk to a meager $33 billion. Sales performance in the U.S. has declined, and consumer behavior has fundamentally changed.

People are no longer fond of processed foods and prefer to buy fresh foods in the perimeter areas of supermarkets. Despite owning well-known brands such as Velveeta and Oscar Mayer, Kraft Heinz is gradually losing market relevance.

Analysts have pushed some of the blame onto 3G Capital's aggressive cost-cutting strategy, which has left the company with no money to invest in its brand when it needed it most. Kraft Heinz has had to sell off a significant amount of assets, including Planters nuts and part of its cheese business.

At the same time, they tried to revive brands like Capri Sun and Lunchables by increasing investment, but the results were not good. In May of this year, Kraft Heinz executives admitted they were considering strategic adjustments and even possible deals.

This split is the result of that process. The company did not say whether there will be more splits or asset sales, but the structure from 2015 has clearly become ineffective.

Despite the mess, Buffett still hasn't exited. He told CNBC that Berkshire Hathaway will do what is most beneficial for the company. He also made it clear: if someone is willing to buy their shares, Berkshire will not accept private transactions unless every other shareholder gets exactly the same terms. This means no backdoor deals or special transactions.

In that terrible quarter of 2019, Buffett admitted that Berkshire "paid too high a price for Kraft." But unlike other investors who exited years ago, he still holds. Whether this patience will be rewarded after the new split is truly questionable.

Tsk tsk, even investment tycoons who are as rich as a country can misjudge sometimes. It seems even a genius like Buffett can't escape the pitfalls of mergers and acquisitions. He really messed up this battle.