US billionaire investor Warren Buffett has again hit out at the way Kraft Foods bought UK confectioner Cadbury.
Buffett, head of investment fund Berkshire Hathaway, which has an 8% stake in Kraft, told the fund’s annual shareholder meeting that Kraft’s strategy for acquiring Cadbury was “dumb”.
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It is not the first time the so-called Sage of Omaha has slammed the way Kraft structured its offer for the Dairy Milk maker.
Buffett first criticised Kraft’s approach for Cadbury in January, when the US food giant devised a plan to use new Kraft shares to part-fund the takeover. He then argued the value of Kraft’s bid for Cadbury was higher than the US group’s management had claimed.
Buffett also claimed Kraft’s offer for Cadbury compared unfavourably to the price the company secured from selling its pizza business to Nestle earlier in January.
“Both deals were dumb,” Buffett told Berkshire Hathaway investors in Omaha this weekend, according to Bloomberg. “The pizza deal was particularly dumb… I just hated to see them give up a significant portion of those businesses to buy Cadbury.”
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By GlobalDataBuffett went to describe Kraft chairman and CEO Irene Rosenfeld as a “perfectly capable” manager.
Officials at Kraft could not be reached for immediate comment. The Milka and Cote d’Or chocolate maker will publish its first-quarter results on Thursday (6 May).
