3G Capital’s symbiotic relationship with Warren Buffett is well known–3G needs Warren Buffett’s patronage in order to gobble up the leading consumer brands in the United States, and Warren Buffett needs 3G because of his temperamental, or at least reputational, unsuitability for being directly associated with terminating the employment of thousands. We are finally getting our first peek at what the launching point for the Kraft-Heinz food conglomerate looks like, with the immediate profile being this: Kraft-Heinz pumps out $3.3 billion in profits per year and makes an average of 11.9% on every Heinz ketchup, Philadelphia cream cheese, Maxwell House coffee, Kraft cheese, Planters peanut, Oscar Mayer hot dog, and Velveeta macaroni and cheese sold.
Under previous management, this would warrant a valuation of about 20x earnings for a combined conglomerate value of $66 billion. At a current price of $72, the market cap is $86 billion. The current price … Read the rest of this article!