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Stocks B / Berkshire Hathaway
|Subject: Re: Rethinking Heinz addition||Date: 2/23/2013 11:39 AM|
|Author: DrtThrwingMonkey||Number: 199022 of 229028|
"All this begs the question: why didn't BRK make the Heinz acquisition alone?"
I know it's a quote, but it doesn't beg the question, it raises it.
But once raised, the question is easily answered: BRK did the acquisition with 3G because it was brought to Buffett by 3G, and on terms that were favourable to Berkshire. It would be more pertinent to ask why 3G didn't do the acquisition alone. But Fitch goes on to answer their own question:
All this begs the question: why didn't BRK make the Heinz acquisition alone?
Fitch has no inside information to answer this question, but it certainly
appears this is an acquisition that was initiated and conceptualized by 3G
Capital. One could argue it shares characteristics of 3G Capital's earlier
acquisition of Burger King, which proved highly successful.
The key is that the likely strategic investment play in this case is a
restructuring of Heinz's operations and financial structure, a skill set
arguably more greatly possessed by 3G Capital than BRK. BRK's main value-add is,
in turn, their deep pockets and the legitimacy of the deal being associated with
BRK and Mr. Buffet.
English usage and spelling do not seem to be Fitch's forte, but at least their logic seems intact.
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