Kraft Heinz Hits 52-Week Low as Berkshire Hathaway Paves Way for Exit
SEC filing registers Warren Buffett's firm to sell its entire 27.5% stake, creating a massive share overhang and signaling a potential end to a troubled investment.
Shares of Kraft Heinz Co. (KHC) plunged to a new 52-week low on Wednesday, closing down 5.7% to $22.40 after a regulatory filing revealed that its largest shareholder, Warren Buffett's Berkshire Hathaway, has the option to sell its entire stake in the food giant.
The prospectus, filed with the Securities and Exchange Commission, registers Berkshire to sell its 325.4 million shares. The potential divestment of this 27.5% ownership position, worth approximately $7.3 billion at Wednesday's closing price, creates a significant technical overhang on the stock and signals a potential vote of no confidence from its most influential backer.
The filing gives Berkshire the right, but not the obligation, to sell shares from time to time. However, the move was enough to send a chill through the market, with trading volume surging as investors digested the possibility of a massive influx of shares hitting the open market.
The relationship between Buffett and Kraft Heinz has been a long and scrutinized one. Berkshire Hathaway, alongside private equity firm 3G Capital, orchestrated the $23 billion acquisition of H.J. Heinz in 2013, which was followed by the massive $49 billion merger with Kraft Foods in 2015. The deal created a consumer-packaged goods behemoth, but the company has since struggled to keep pace with changing consumer tastes, which have drifted away from processed foods. The company's large debt load, a legacy of the merger, has also been a persistent concern for investors.
Buffett himself has publicly expressed regret over the price paid in the Kraft deal. The potential exit follows years of underwhelming performance and a significant dividend cut in 2019 that soured market sentiment. Berkshire recorded a multi-billion dollar write-down on its investment in the years following the merger, a rare misstep for the famed investor.
Wall Street analysts responded swiftly to the news, adding to the stock's downward pressure. JPMorgan lowered its price target on the stock to $24 from $25, while maintaining a 'Neutral' rating. Jefferies also trimmed its target, citing demand challenges and uncertainty surrounding the company's previously announced plan to split into two independent entities.
The potential for a Berkshire exit comes at a pivotal moment for Kraft Heinz. In September 2025, the company announced a major strategic shift, revealing plans to separate into two publicly traded companies by the second half of 2026—one focused on grocery and food service, and the other on snacks and international brands. This latest development introduces a significant new layer of uncertainty into that complex process.
For investors, the filing raises critical questions about the future of Kraft Heinz without its foundational shareholder. The market will now be closely watching for any signs of an actual sale by Berkshire, an event that could mark the final, disappointing chapter in one of Wall Street's most high-profile dealmaking sagas.