Belfast Telegraph

Saturday 19 April 2014

Warren Buffett the world's most famous investor adds beans to portfolio stuffed with ice cream, Coke and candies

An investment consortium including billionaire investor Warren Buffett plans to buy Heinz for 28 billion US dollars
An investment consortium including billionaire investor Warren Buffett plans to buy Heinz for 28 billion US dollars

Whenever Warren Buffett dines at Gorat's Steak House, his favourite restaurant in downtown Omaha, he reportedly places the same order: a roast beef sandwich with extra gravy.

 What's unclear, however, is whether he smothers said sandwich in the Heinz brand ketchup for which he and his private equity partners agreed to shell out $23bn yesterday.

The billionaire, often referred to as the Sage of Omaha for his record of shrewd investments, has a history of gobbling up storied American brands, including Dairy Queen and Fruit of the Loom.

Now, after buying Heinz with 3G Capital, he can count not just the famous ketchup but also the company's Baked Beans and Bagel Bites as part of his vast portfolio. The deal will also bring TGI Friday's frozen snacks - but not the restaurant chain - into the Buffett fold.

Fond of junk food, Mr Buffett, 82, who has a net worth of around $46bn at last count, already owns a sizable stake in Coca-Cola, another of his personal favourites.

He is said to consume no less than five cans of Cherry Coke every day (alongside bags of Pepsi Co-owned Cheetos and Fritos). At the annual meeting of his Berkshire Hathaway investment business, meanwhile, he is often seen munching on sweets from See's Candies, another old-time American brand now owned by the investor.

Heinz itself was founded by Henry John Heinz and his neighbour in the Pittsburg suburb of Sharpsburg in 1869. The first product wasn't ketchup but grated horseradish. The launch of ketchup in 1876 kicked off a run of growth which eventually led the company to go public in the 1940s.

The deal is worth $28bn, which includes both its debt and shares, translates into a nice payoff for shareholders - probably including the newly installed US Secretary of State, John Kerry. His wife, Teresa, was the widow of Senator John Heinz III, great-grandson of the Henry John Heinz.

According to an analysis of disclosure forms filed by Secretary Kerry last year, he held around $3m of Heinz shares, which jumped by around 20 per cent following the announcement of the Buffett deal.

Assuming he hasn't sold his stake, America's top diplomat would have turned a nice profit on his investment. Mrs Heinz Kerry is reported to be a beneficiary of Heinz family trusts.

When President Obama nominated him to succeed Hillary Clinton, Mr Kerry said he would divest himself of a number of assets to avoid possible conflicts of interest. Heinz was not mentioned.

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