Kraft Heinz's stock drops as Berkshire Hathaway may sell its $7 billion stake

By Mike Murphy

Selling the stake would be a first major move by Berkshire's new CEO, and comes as Kraft Heinz looks to unwind a merger that Warren Buffett had backed

Kraft Heinz is in the process of splitting up.

Shares of Kraft Heinz sank Wednesday after the food giant disclosed that Berkshire Hathaway, its largest shareholder, may sell nearly its entire stake.

In a filing late Tuesday with the Securities and Exchange Commission, Kraft Heinz said Berkshire - the company founded by Warren Buffett - could sell up to 325,442,152 of its shares. Berkshire held that amount of shares, or 27.5% of the shares outstanding, before the offering, the filing said.

At current stock prices, the value of Berkshire Hathaway's holdings would be about $7.3 billion.

Kraft Heinz stock (KHC) slid 5.2% in recent morning trading Wednesday, enough to lead the S&P 500 index's SPX decliners, and to put it on track for the lowest close since March 23, 2020. Shares of Berkshire (BRK.A) (BRK.B) were little changed.

The food giant is in the process of unraveling its 2015 merger between Kraft Foods and Heinz, as it intends to split into two publicly traded companies. Buffett was a major backer of the deal, and told CNBC in September that he was "disappointed" by the breakup.

But the company has to do something, to spark a turnaround. As BNP Paribas analyst Max Gumport wrote in a note to clients, after five years of volume declines, "we believe it's fair to say the status quo is not sustainable."

This would be the first major move by Berkshire's new CEO Greg Abel, who succeeded the retiring Buffett at the beginning of the year.

Kraft Heinz shares have dropped 23.6% over the past 12 months, compared with the 13.2% rise in the S&P 500, and have fallen more than 70% since the 2015 merger closed.

-Mike Murphy

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01-21-26 1009ET