One such case is the Kraft acquisition, where the food producer Kraft Heinz was created with famous brands spanning from Heinz ketchup to Kraft macaroni and cheese. Berkshire Hathaway owns over a quarter of Kraft Heinz stock based on recent filings. For example, Buffett stressed how, in broad terms, Kraft Heinz is able to earn approximately $6 billion of pre-tax profits on $7 billion of operating assets. This example showed other interested parties in Kraft that there was real potential in the Kraft assets. Secondly, even though overpaying for good businesses is clearly a problem, Buffett believes buying a fundamentally bad business is a worse mistake.

Source: Forbes May 05, 2019 11:03 UTC