Warren Buffett told CNBC that he has no tensions with 3G Capital, Berkshire Hathaway's partner in the troubled Kraft Heinz.
Berkshire's Chairman and CEO said in response to reports and rumblings on Wall Street that 3G co-founder Jorge Paulo Lemann is "a good friend" and noted that Lemann attended Berkshire Hathaway's annual meeting in Omaha last month with family members Lemann was discovered at a private party attended by Buffett and led by Berkshire board member Walter Scott after the annual meeting
Buffett also said he plans to see Lemann next month at Allen & Co.'s Sun Valley conference and attend Lemanns 80 ̵
Questions about voltages may have been triggered by Kraft Heinz & # 39; s underperformance and because of accounting issues with the packaged merchandise. The shares have lost more than 50% of the value over the past 12 months. In February, Kraft Heinz announced that it had written down the value of its $ 15.4 billion Kraft and Oscar Meyer brands, slashed dividends, and revealed an investigation by the Securities & Exchange Commission into the accounting and procurement procedures. In May, the company said it would recover nearly three years of its financial reports following an internal cost-cutting survey.
Warren Buffet goes to the floor at the 2018 Berkshire Hathaway Annual Shareholder Meeting in Omaha, NE May 5, 2018.
Lacy O & # 39; Toole | CNBC
Buffett said the biggest problem facing Kraft Heinz is that Heinz overpaid when merging with Kraft in July 2015. The deal was agreed by Berkshire and 3G, which jointly owned Heinz at that time.
"I have made a mistake in the Kraft purchase when it comes to paying too much," Buffett said, adding that the Kraft and Oscar Meyer marks were a confirmation of that. The company is now saddled with about $ 31 billion in debt. "It will take time to chop it down," he said.
Buffett also expressed support for the incoming CEO of Kraft Heinz, Miguel Patricio. Buffett stepped down from the Kraft Heinz board in 2018, but Berkshire Hathaway, Vice President Abel Abel, is still on the board and has been actively involved, Buffett said. "Both he and I are happy with the selection of Miguel," Buffett said. "Greg has spent time with him, I don't. But Greg's high on him and that's why I'm high on him."
At Berkshire Hathaway's Annual General Meeting in May, Buffett and Berkshire took the Vice President Charlie Munger questions about the partnership with 3G. "What I find interesting about the 3G situation, there were a lot of transactions that worked very well, and finally there was a transaction at the end that didn't work so well," Munger said at the time.
"No idea is good at any cost, and the price settlement is probably something we worry about more generally than our partners, but we are their partners in Kraft Heinz," added Buffett. "And it's not unlikely that we could be partners in another transaction in the future."