Acquisition adds Heinz to deep portfolio of Berkshire Hathaway
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The $28 billion acquisition of H.J. Heinz marries Pittsburgh's iconic ketchup and pickle maker into a family of well-known brands in the deep portfolio of Berkshire Hathaway.
Omaha-based Berkshire, overseen by legendary investor Warren Buffett, has invested in a wide swath of American industry: Burlington Northern Sante Fe, one of the nation's largest railroads; insurer GEICO; Benjamin Moore paints; Fruit of the Loom; Dairy Queen; Pampered Chef; and Net Jets, operator of the world's largest fleet of private jets.
Berkshire also owns stakes in the Buffalo News and other newspapers; Lubrizol, a Cleveland specialty chemicals company; natural gas pipelines; and a distribution business that sells groceries and other products to Wal-Mart, 7-Eleven and other retailers.
In 2008, Mr. Buffett helped Mars become the world's largest candy maker by providing $6.5 billion for its $23 billion acquisition of W. Wrigley, the maker of Juicy Fruit, Life Savers and other candies.
Berkshire also has invested $8 billion in preferred stock issued by Bank of America and Dow Chemical .
Mr. Buffett, known as the Oracle of Omaha because of his investment skills, is an opportunistic investor known for striking when fear and risk dominates financial markets.
When cash and credit were scarce during the 2008 financial crisis, Berkshire invested $8 billion in the preferred stocks of investment banker Goldman Sachs and General Electric, which was saddled by its ailing GE Capital arm. Berkshire collected 10 percent dividends on the investments until Goldman and GE repurchased the shares three years later.
Berkshire's businesses collected revenue of $116.7 billion in the first nine months of last year compared to the $18.5 billion in ketchup, pickles, relish and other products Heinz sold in its most recent fiscal year.
First Published February 14, 2013 12:01 pm