Kraft Heinz Faces Major Sell-Off as Top Shareholder Berkshire Hathaway Exits

In a significant shift for the packaged food giant, Berkshire Hathaway has filed paperwork with the SEC that clears the way for it to divest its entire stake in Kraft Heinz. The move sent the company's shares tumbling to a five-year low, driven by an underlying strategic clash over Kraft Heinz's planned corporate breakup.

The regulatory filing pertains to the potential sale of up to 325.4 million common shares, representing approximately 27% of the company. While the document allows Berkshire to sell the position "from time to time" and does not mandate an immediate sale, the market reacted decisively to the possibility. On the day following the announcement, the stock price plunged 5.7% to $22 per share.

The departure of its largest and most stable anchor investor places Kraft Heinz under considerable new selling pressure. In response to the development, equity researchers at JP Morgan, Morgan Stanley, and UBS have all revised their price targets for the stock downward.

Strategic Split Sparks Friction with Key Investor

The core catalyst for Berkshire's decision appears to be a fundamental disagreement with Kraft Heinz's management strategy. The company's leadership intends to separate the business into two publicly traded entities by the end of 2026: one focused on "Global Taste Elevation" and the other on "North American Grocery." A contentious element of the plan is that shareholders will reportedly not be granted a vote on the matter.

Should investors sell immediately? Or is it worth buying Kraft Heinz?

Sources indicate that both Warren Buffett and his designated successor, Greg Abel, opposed the separation strategy. The SEC registration is widely interpreted as a signal that Berkshire's new leadership is streamlining its investment portfolio, with Kraft Heinz now marked for removal.

Prolonged Downtrend Intensifies

This latest development exacerbates an already challenging period for the food producer's equity. Over the past twelve months, the stock has declined by 17.8%, including a 5.4% drop in the last month alone. The shares are currently trading near their 52-week low, and the potential exit of its principal shareholder is expected to accelerate the existing downward trajectory.

Despite the resistance from its largest investor, Kraft Heinz management remains committed to executing the planned split as scheduled. A key question now facing the market is whether the company can attract new investors without Berkshire Hathaway's stabilizing presence as a cornerstone shareholder.