Jorge Lemann: With Buffett on the hunt for fat booty
Jorge Lemann has a reputation as a cost reducer with fusionitis. He has already successfully implemented this strategy in the beer market. Now he seems to repeat the same in the food business.
The takeover carousel is turning in the food industry. The Kraft Heinz Company is to take over Mondelez as a very well-informed source from the food industry knows. Rumors about this transaction have existed since the beginning of November.
Drivers behind the acquisition is Jorge Paulo Lemann be the second richest Swiss. His Brazilian 3G investment has already begun to mobilize capital for the transaction. Probably Berkshire Hathaway would of legendary investor Warren Buffett again be a co-investor here, as with the transaction, the Kraft Foods and Heinz last year for The force Heinz Company brought together.
"Merge two icons and create a platform for leadership in the food industry", the merger was communicated by the new owners, which already indicated further takeovers. On the Board of The Kraft Heinz Company, Lemann and Buffett have two icons that oversee brands like Capri Sun, Philadelphia and Ketchup from Heinz.
Hard cost reduction with fusionitis
Lemann has a reputation as a tough cost reducer with fusionitis. He has successfully implemented this strategy in the beer market with his AmBev. Now he seems to repeat the same in the food business. For this, Mondelez would fit, because there the costs in the industry comparison seem too high. The Mondelez profit margin amounts to only 8.6 per cent, according to the financial information service Bloomberg, whereas it is almost 13.5 per cent at Kraft Heinz Company.
A little confusing is that Mondelez was split by brands such as Milka, Toblerone, Trident, Tuc and Stimorol only in 2011 by Kraft. In addition, Mondelez was still active as a company hunter in June and has submitted a $ 23 billion offer to the US competitor Hershey - Hershey's Board of Directors declined.
Rumors said at the time that Mondelez had mainly gone out of the line of fire - the merged company would have been too big for a takeover. Even so, the company with a market value of 66 billion dollars is not a small dessert.