Kraft Heinz Shares Fall After Cutting 3G Capital Stake

The History of Kraft Heinz

Kraft Heinz Shares Fall After Cutting 3G Capital Stake

The second largest investor in Kraft Heinz says it has again reduced its stake in the food company.

3G Capital Partners, the Brazilian private equity giant founded by Jorge Paulo Lehmann, said it sold 25.1 million shares at $ 28.44 per share, dropping its stake by about 9% to 245 million shares..

The private equity firm is the second largest shareholder in the company after Warren Buffett’s Berkshire Hathaway. After the sale, 3G Capital still owns 20% of Kraft Heinz. Shares fell 2.6% in premarket Tuesday.

The sale of 3G shares was also prompted by the fund’s periodic lack of liquidity. The private equity fund currently has no intention of further selling any shares, a spokesman for Kraft Heinz told CNBC..

Warren Buffett on what he plans to do with his Kraft Heinz shares and 3G Capital

Kraft Heinz shares fell by almost 25% in February after the news that cost of two iconic brands of the company Kraft and Oscar Mayer fell $ 15.4 billion. The company also cut its dividend by 36% to 40 cents per share and announced that it had received a subpoena from the Securities and Exchange Commission regarding its accounting policies and internal arrangements in 2018..

Kraft Heinz Shares Fall After Cutting 3G Capital Stake

The company’s shares dipped to new lows last month after Kraft Heinz again postponed its financial results and lost another $ 1.22 billion worth of your business.

Kraft Heinz shares hit a record low on Aug 28 and are down more than 31% in 2019 and about 50% in the past 12 months. By early August, Berkshire Hathaway had lost nearly $ 5 billion in its investments in Kraft heinz this year alone.

3G Capital has built a successful reputation on Wall Street by cutting costs in the companies it invests in or acquires through strict budgeting, layoffs and other changes. The firm bought Heinz in 2013 and then merged the company with Kraft in 2015. But this strategy has stumbled upon a market situation with canned food producer Kraft, which sees a serious threat to competition posed by a trend towards fresher and healthier foods. Some investors believe that 3G will not be able to revive Kraft by cutting costs alone, and may need to invest more to compete in this environment..