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Warren Buffett, Berkshire Hathaway’s legendary CEO, voiced his disappointment over Kraft Heinz’s recent split, a move that reverses much of the high-profile merger he helped orchestrate in 2015. Following his comments, Kraft Heinz shares fell more than 7%, reflecting investor uncertainty.

Buffett’s Perspective on the Split

Buffett, whose firm holds a 27.5% stake in Kraft Heinz, told CNBC that while the original merger with H.J. Heinz had not produced the anticipated results, dismantling the company is unlikely to solve its underlying challenges.

“Taking the company apart won’t necessarily fix the problems,” Buffett said, highlighting his concerns over the strategic direction of the food conglomerate. He added that Berkshire Hathaway will act in the best interest of the company and its shareholders if approached with any offers to sell its stake.

Greg Abel, Buffett’s successor at Berkshire Hathaway, reportedly also expressed disappointment to Kraft Heinz management over the decision. Kraft Heinz did not immediately respond to requests for comment.

Details of the Split

The restructuring divides Kraft Heinz into two separate entities: one focused on sauces, spreads, and shelf-stable meals, and the other covering North American staples like Oscar Mayer, Kraft Singles, and Lunchables.

The split comes after years of underperformance for Kraft Heinz in the U.S. market, despite holding iconic brands such as Velveeta, Capri Sun, and Planters nuts. Health-conscious consumer trends and shifts toward fresh foods contributed to a decline in packaged food sales, while cost-cutting measures limited brand investment.

Historical Context and Financial Impact

Buffett and private equity firm 3G Capital led the merger in 2015, forming one of the largest food conglomerates in the world. 3G Capital exited its stake in 2023 after gradually reducing its holdings.

Since the merger, Kraft Heinz shares have fallen nearly 70%, bringing the company’s market capitalization to roughly $33 billion. Efforts to revitalize the business included divesting some product lines and investing in growing brands like Lunchables and Capri Sun.

Despite the slump, Buffett has maintained confidence in the company, though he acknowledged after a challenging quarter in 2019 that Berkshire may have overpaid for the original acquisition.

Future Outlook

Buffett emphasized that Berkshire Hathaway will only consider selling its shares under terms that treat all shareholders fairly. Analysts note that while the split may allow Kraft Heinz to focus more efficiently on separate product lines, challenges such as changing consumer preferences and brand revitalization remain critical to its long-term performance.

The company’s next steps will be closely watched by investors and market analysts, as the legacy of the 2015 merger continues to shape shareholder sentiment and market valuations.