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3G Capital reduced its stake in Kraft Heinz for the second time in 12 months, resulting in a distressed processor's share sale, renowned for its grocery pillars, including Kraft Cheese and Kraft Heinz. ketchup Heinz.
Shares of Kraft Heinz fell 4% on Tuesday after learning that the Brazilian buyout company had sold 25.1 million shares, or 9% of its stake, at a price of $ 28.44 per share. It was the second major sale of Kraft Heinz shares by the company over the last year. 3G sold 21 million shares at $ 59.95 in August 2018.
Since joining Warren Buffett to merge H.J Heinz with Kraft Foods in 2015, 3G's share has grown from over 290 million to 245 million shares, or 20% of total outstanding shares. 3G is Kraft Heinz's second largest shareholder behind Berkshire Hathaway of Buffett, which holds 26.7% of the company.
At the time of the sale of the 3G, the co-founder of the company, Jorge Paulo Lemann, invested $ 100 million of its own funds in 3.5 million Kraft Heinz shares, indicates a regulatory filing.
Lemann's investment has sent mixed signals about Kraft Heinz's 3G vision, but has not allayed investors' concerns about the company. Kraft Heinz sales have sank into 3G technology, known for its significant cost savings. The company has sharply reduced expenses as new brands gain market share in front-line products by meeting emerging consumer preferences for higher-quality, healthier food products.
The impact on Kraft Heinz's brands became evident earlier this year when the company wrote off more than $ 15 billion in brand equity from its Kraft, Oscar Mayer and other product lines. Shareholders also paid a heavy price. Kraft Heinz shares have lost more than 70% of their value since their peak of $ 96.65 in February 2017. The stock has traded at $ 28.38 early Tuesday afternoon, down 4, 19% for the day.
Kraft Heinz reversed the trend at the end of last year, promising to boost investment in its brands. In July, a former marketing manager at 3G-controlled beer giant AB InBev took over the management of Kraft Heinz. Miguel Patricio did not outline a detailed growth plan, but hinted that he saw an opportunity to boost sales by taking some high-end brands from Kraft Heinz.
In a statement, Kraft Heinz sought to counter any impression that the sale of 3G shares would testify to a lack of confidence in the strategy or an intention to further reduce its stake.
"The sale was fueled by periodic liquidity windows by 3G investors in the 3G fund that holds shares in Kraft Heinz," the statement said. "3G remains a long-term committed owner of the Company and has no plans or intentions to sell additional shares."
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