Berkshire KHC investment

[shalab]

This one is a home run, it is amazing just how much this is paying back in dividends already. It is more likely than not that the entire original investment (9.8 billion) will be paid back in dividends in less than 10 years.

 

Total shares owned:

 

325,634,818

 

Dividend per year:

 

749 million

 

Market value:

27.4 billion

 

[CorpRaider]

Is that the cost basis for the original Heinz investment?  Wow. 

[Buffett_Groupie]

This one is a home run, it is amazing just how much this is paying back in dividends already. It is more likely than not that the entire original investment (9.8 billion) will be paid back in dividends in less than 10 years.

 

Total shares owned:

 

325,634,818

 

Dividend per year:

 

749 million

 

Market value:

27.4 billion

 

What's Berkshire's cost?  Also, do you have the figures for QSR, also a major Berkshire investment, right?  :)

[gfp]

For the common, Berkshire put in $4.25 billion on Heinz and another $5.26 Billion for the Kraft deal.  Cost basis on the common should be $9.51 Billion unless I'm missing something.  The preferred is about to be repaid for $8.3 Billion in June (600m above carrying value).  It's been a profitable association for sure.

 

For QSR, Berkshire owns 8.4 million shares of common.  1.75% of the company (almost the entire position) was purchased through 1 penny warrants.  The rest presumably in the market before the deal for THI.  At around $350 million, the common of QSR isn't a major investment for BRK.

[JBird]

Thanks for posting!

 

This info is on Page 6 of the 2015 BRK letter for those that are curious.

[shalab]

Calling the partnership "profitable" is a huge understatement. As is the understatement in the AR. The AR noted  below

 

----

 

Our Heinz partnership with Jorge Paulo Lemann, Alex Behring and Bernardo Hees more than doubled its size last year by merging with Kraft. Before this transaction, we owned about 53% of Heinz at a cost of $4.25 billion. Now we own 325.4 million shares of Kraft Heinz (about 27%) that cost us $9.8 billion.

 

The new company has annual sales of $27 billion and can supply you Heinz ketchup or mustard to go with your Oscar Mayer hot dogs that come from the Kraft side. Add a Coke, and you will be enjoying my favorite meal. (We will have the Oscar Mayer Wienermobile at the annual meeting – bring your kids.) Though we sold no Kraft Heinz shares, “GAAP” (Generally Accepted Accounting Principles) required us to record a $6.8 billion write-up of our investment upon completion of the merger. That leaves us with our Kraft Heinz holding carried on our balance sheet at a value many billions above our cost and many billions below its market value, an outcome only an accountant could love.

 

Berkshire also owns Kraft Heinz preferred shares that pay us $720 million annually and are carried at $7.7 billion on our balance sheet. That holding will almost certainly be redeemed for $8.32 billion in June (the earliest date allowed under the preferred’s terms). That will be good news for Kraft Heinz and bad news for Berkshire.

 

  globalfinancepartners said:

 

  It's been a profitable association for sure.

 

This one is a home run, it is amazing just how much this is paying back in dividends already. It is more likely than not that the entire original investment (9.8 billion) will be paid back in dividends in less than 10 years.

 

Total shares owned:

 

325,634,818

 

Dividend per year:

 

749 million

 

Market value:

27.4 billion

 

What's Berkshire's cost?  Also, do you have the figures for QSR, also a major Berkshire investment, right?  :)