Warren Buffett disappointed in Kraft Heinz split; stock drops

Warren Buffett Slams Kraft Heinz Split: Stock Plunges as Iconic Merger Unravels

Warren Buffett’s rare public rebuke of Kraft Heinz’s decision to split into two companies sent shockwaves through Wall Street, triggering a sharp drop in the food giant’s stock. The billionaire investor, whose Berkshire Hathaway owns a 27.5% stake, expressed deep disappointment, unraveling a decade-long bet that once promised to reshape the industry.

The Split and Buffett’s Reaction

On September 2, 2025, Kraft Heinz announced it would divide into two public companies: one focusing on sauces, spreads, and shelf-stable meals (including Heinz and Kraft Mac & Cheese), and another centered on North American staples like Oscar Mayer and Lunchables. The move aims to streamline operations and boost brand performance, according to executive chairman Miguel Patricio, who cited challenges in capital allocation under the current structure.Buffett, speaking to CNBC’s Becky Quick, called the split a mistake, arguing it won’t solve Kraft Heinz’s deeper issues. “The merger didn’t turn out to be a brilliant idea, but I don’t think breaking the company apart will fix its problems,” he said. His chosen successor, Greg Abel, echoed this sentiment, directly conveying Berkshire’s disapproval to Kraft Heinz leadership. Following Buffett’s comments, Kraft Heinz (KHC) shares dropped over 7%, closing at $25.876, as seen in the finance card above.

Background on the Kraft Heinz Merger

Buffett’s Berkshire Hathaway, in partnership with private equity firm 3G Capital, orchestrated the 2015 merger of Kraft Foods and H.J. Heinz, creating a food conglomerate with iconic brands like Velveeta and Philadelphia cream cheese. The $49 billion deal aimed to cut costs and drive growth but faltered as consumer preferences shifted toward healthier, less processed foods.Since the merger, KHC stock has lost nearly 70% of its value, with its market cap now at approximately $33 billion. Buffett admitted in 2019 that Berkshire overpaid for Kraft, a rare misstep for the Oracle of Omaha. While 3G Capital exited its stake in 2023, Berkshire has held firm, maintaining 326 million shares—its seventh-largest public equity holding.

Public and Expert Reactions

The announcement and Buffett’s criticism sparked intense reactions. On X, users debated the split’s merits, with one post noting, “Buffett calling the deal ‘flawed’ is a big deal—KHC’s in trouble.” Financial analysts were divided. Some, like those at JPMorgan, see potential for leaner operations, while others echoed Buffett’s skepticism, citing risks of brand dilution and execution challenges.Edward Jones analyst John Boylan told Reuters that the split could unlock value but introduces uncertainty around leadership and capital allocation. Meanwhile, retail sentiment on Stocktwits remained “extremely bullish,” suggesting some investors see opportunity in the shake-up.

Impact on U.S. Investors and Markets

The Kraft Heinz split and Buffett’s disapproval resonate deeply with American investors, given his legendary status and Berkshire’s massive stake. The stock’s 7% drop, as shown in the finance card above, wiped out significant market value, impacting portfolios and raising questions about the food industry’s future. With KHC’s dividend yield exceeding 6%, income-focused investors may still find it appealing, but volatility looms.This development also reflects broader U.S. economic trends, as consumer shifts toward healthier eating continue to challenge legacy food brands. The split could influence competitors like Nestlé and PepsiCo, prompting strategic reevaluations across the sector. For retail investors, Buffett’s stance serves as a cautionary signal, potentially tempering enthusiasm for similar corporate restructurings.

Conclusion and Future Outlook

Warren Buffett’s disappointment in the Kraft Heinz split underscores a rare miscalculation in his storied career, with the stock’s sharp decline reflecting investor unease. As Kraft Heinz moves forward with its plan to create two entities, questions remain about whether the restructuring will deliver promised growth or exacerbate existing challenges. For now, Buffett’s unwavering stake and insistence on equal treatment for all shareholders signal his long-term commitment, but the path ahead for Kraft Heinz—and its investors—remains uncertain.