Snacks & Candy

Is Kraft Heinz Poised to Acquire Mondelez?

Majority investor Buffett shares his thoughts

CHICAGO -- Kiss this potential snack and candy megadeal goodbye. Investor Warren Buffett said in early September that Kraft Heinz isn’t interested in buying snack maker Mondelez, an acquisition that had been seen as a possibility by analysts.

Buffett, CEO of Berkshire Hathaway, which holds a majority stake in Kraft Heinz, was asked during an interview on CNBC whether Kraft Heinz would purchase the snack giant. He replied, “I think the answer is no on that.”

In February, Chicago-based Kraft Heinz’s $143 billion bid for Unilever was rejected, sinking what would have been the largest takeover ever in the food and beverage industry. Since then, there has been speculation Kraft Heinz would attempt another deal, and Mondelez has been cited as one possible target.

In dampening the takeover rumors, Buffett told CNBC that getting bigger through mergers or acquisitions “doesn’t really help [brands] that much” while negotiating with retailers.

Instead, he emphasized the bargaining power of strong individual brands.

“It does help to have a group of big, powerful brands if you’re negotiating with a big retailer,” he said. “But what they really care about is the strength of the specific brand.”

Buffett said it’s not that Mondelez’s brands, which include big names such as Oreo, Ritz and Trident, aren’t worthy, but that “there’s not the additive factor if you have 10 big brands vs. one.”

Mondelez International is based in East Hanover, N.J.

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