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Stocks B / Berkshire Hathaway
|Subject: Re: Berkshire buys Heinz||Date: 2/14/2013 9:02 AM|
|Author: LONGREITS||Number: 198551 of 227227|
I love how people come to conclusions immediately about whether it was a good or bad idea. They're sitting on the couch, at most opened the 10-k for 10-15 minutes (a stretch), and browsed the PE ratio on yahoo finance and perhaps took a look at the Heinz website.
I have no idea whether it was a good deal but I was happy with the announcement because BUFFETT THINKS IT WAS A GOOD DEAL and I TRUST HIS JUDGMENT UNTIL HE GIVES ME REASON NOT TO. HE FOUND SOMETHING HE THINKS HAS VALUE. I AM VERY HAPPY AS A SHAREHOLDER.
3G complicates the deal. They are the controlling shareholder of Anheuser Busch and created significant value there. The company consists of almost entirely Brazilians. I'm would guess they saw some value in Heinz, needed a large partner, and went to Buffett. I'm sure we will hear the backstory in time. Buffett was obivously pursuaded.
I was surprised Buffett would partner with a PE firm. Didn't he say only weeks ago that he couldn't think of anyone in PE that he admired? Maybe that was in the context of hedge funds.
Heinz, fwiw, is a big player in Brazil.
Coniexpress is a leading Brazilian manufacturer of the Quero® brand of tomato-based sauces, tomato paste, ketchup, condiments and vegetables. The Quero® brand holds number one or number two positions in tomato product categories in Brazil and the leading position in vegetables. This Fiscal 2011 acquisition included a modern factory that is centrally located in Neropolis and a new distribution center. Based near Sao Paulo, the Quero® business has over 1,800 employees. The Company has the right to exercise a call option at any time requiring the minority partner to sell his 20% equity interest, while the minority partner has the right to exercise a put option requiring the Company to purchase his 20% equity interest (see Note 18, “Commitments and Contingencies” in Item 8- “Financial Statements and Supplementary Data” for additional explanation).
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