The Strategist

Kraft Heinz to get new CEO

04/23/2019 - 16:34

Heinz, the ketchup producer, is going to get a new CEO. The company has still not recovered from the February collapse of quotations that forced Buffett to admit that he overpaid for Kraft during its merger with Heinz.

Kraft Heinz CEO Bernardo Hees will leave the position in June, the company said in a statement. The new CEO will be Miguel PatrĂ­cio. He has been working for about 20 years at Anheuser-Busch InBev brewing company in various positions. In particular, as a marketing director in 2012-2018, he promoted brands such as Corona, Budweiser and Stella Artois.

The company, which produces Kraft cheese and Heinz ketchup, is going through a difficult time, writes Financial Times. In February, Kraft Heinz reported that it wrote off $ 15.4 billion of losses on goodwill impairment. In addition, it reported a quarterly loss of $ 12.6 billion after a profit of $ 11 billion in 2017 and a decrease in the amount of dividends by a third. The manufacturer also said that the Securities and Exchange Commission is checking finances in one of its divisions. After the publication of the report, the company lost about $ 17 billion in capitalization as shares of Kraft Heinz fell by almost a third and still have not returned to their previous price.

Kraft Heinz is one of the largest assets of Berkshire Hathaway investment fund of billionaire Warren Buffett. The businessman ranks third in the list of the richest people in the world according to Forbes. The magazine estimated his fortune at $ 82.5 billion. Berkshire Hathaway bought Heinz in 2013 along with Brazilian 3G Capital for $ 23.3 billion (the main owner of 3G Capital is Brazilian businessman Jorge Paulo Lemann; No. 35 in the Forbes billionaires rating with a fortune of $ 22.8 billion). Two years later, the consortium acquired Kraft to merge the two manufacturers into one company for $ 63 billion.

In the same year, the combined company held an IPO on the Nasdaq exchange. At that time, it was valued at $ 89 billion. On Monday, Kraft Heinz's capitalization was about $ 40.5 billion. After the company's collapse of capitalization, Buffett admitted that he overpaid for Kraft during its merger with Heinz. But he stressed that he is not planning to sell the asset.