Sunday, April 5, 2015

Kraft-Heinz Merger

On March 25, Kraft and Heinz announced about their merger that would close by the 2H2015. The deal structured very creatively (as usual with BRK and 3G combination). The question for shareholders of Kraft before the annoncement is simple. They can either keep theri shares (which will be exchanged with 1 share of combined company plus special cash distribution) or they just sell the stock before or after the cash distribution.

The real question is for people who were not shareholders before the announce is does this newly annouced company have a potential to become a good candidate for successful investing. I have been researching the topic and came to a conclusion that though the deal seems a bit pricey, one has a good chance of making a nice 10%-15% return on an annual basis by investing in the newly formed Kraft-Heinz company.

Here is an excellent write up by The Brooklyn Investor on the merger of Kraft and Heinz:The Brooklyn Investor: Kraft-Heinz.

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Why Companues Go Public: Rationality Comes First

This is a post that was written as a response to the post on FB. Here is the link: