3G Capital quietly exited its Kraft Heinz investment last year

Brazilian
private
equity
firm
3G
Capital
quietly
sold
off
its
16.1%
stake
in


Kraft
Heinz
in
the
fourth
quarter,
nearly
nine
years
after
masterminding
the
blockbuster
merger
of
Kraft
Foods
and
Heinz
with
Warren
Buffett.

The
sale
marks
the
end
of
an
era
for
3G.
The
firm’s
influence
over
Kraft
Heinz
had
been
dwindling
in
recent
years
as
its
number
of
board
seats
slipped
from
three
to
none
by
July
2022.

“3G
has
not
been
involved
in
the
management
of
Kraft
Heinz,
nor
have
they
been
on
the
Board
for
several
years.
They
had
continued
to
be
an
investor
and
were
treated
as
we
do
any
investor,”
Kraft
Heinz
said
in
a
statement
to
CNBC. “We
did
learn
from
their
recent
filing
that
3G
exited
the
Kraft
Heinz
stock
entirely
in
2023.”

The
company
added
that
Buffett’s
Berkshire
Hathaway,
its
largest
shareholder
with
a
26.8%
stake,
is
a
committed
long-term
owner.

3G
did
not
immediately
respond
to
a
request
for
comment
from
CNBC.

Berkshire
and
3G’s
doomed
romance
began
on
Valentine’s
Day
in
2013
when
the
two
firms
announced
they
were
teaming
up
to
take
Heinz
private.
The
merger
with
Kraft
Foods
followed
two
years
later.

The
new
company
initially
pleased
investors
with
its
earnings
growth,
thanks
to
its
cost-cutting
approach
favored
by
3G.
The
firm
had
already
found
success
with
that
strategy
when
it
created
beer
giant
Anheuser-Busch
InBev
through
a
series
of
megamergers
and
took
Burger
King
private
and
revived
its
sales.

But
the
packaged
food
business
presented
new
challenges.
Consumers
were
shifting
to
eating
more
fresh
food.
Plus,
retailers’
private-label
brands
and
newcomers
touting
themselves
as
a
healthier
option
were
stealing
Big
Food’s
shoppers.
Kraft
Heinz
sought
to
drive
inorganic
growth
through
a
takeover
bid
for
Unilever,
but
the
Popsicle
owner

rejected
its
offer.

Then
a
disastrous

quarter
came
for
Kraft
Heinz
in
2019.
In
a
single
earnings
report,
the
company
slashed
its
dividend,
disclosed
a
Securities
and
Exchange
Commission
investigation
into
its
accounting
practices
and
wrote
down
its
brands
by
$15
billion.

Several
months
later,
Buffett

told
CNBC
that
Berkshire
and
3G
overpaid
for
Kraft
Heinz,
buoyed
by
optimism
that
its
brands
were
more
valuable
than
they
actually
were.
Still,
he

stood
by
both
3G
and
Kraft
Heinz.
Other
investors
blamed
3G’s
aggressive
cost
cutting
for
the
company’s
troubles.

To
reverse
the
company’s
downward
spiral,
3G
handpicked
the
food
giant’s
new
chief
executive,
an
AB
InBev
veteran,
and
Kraft
Heinz
went
into
turnaround
mode.
The
company

announced
plans
to
ramp
up
its
marketing
and
advertising
spending
and
shift
its
strategy
for
making
new
products.
To
reduce
its
exposure
to
private-label
competition,
it
also
sold
its
cheese
business
to
Lactalis,
a
French
dairy
giant,
and
its
Planters
nuts
brand
to


Hormel.

In
2021,
3G
founding
partner
Jorge
Paulo
Lemann
stepped
down
from
Kraft
Heinz’s
board.
The
following
year,
fellow
founding
partner
Alexandre
Behring
left
the
board.
And
two
months
after
Behring’s
departure,
3G’s
final
board
member,
former
AB
InBev
CEO
Joao
Castro-Neves,
also
stepped
down.
Kraft
Heinz
disclosed
his
departure
in
a
regulatory
filing
but
no
press
release
—
or
fanfare
—
accompanied
it.

3G
had
been
periodically
trimming
its
stake
in
Kraft
Heinz
since
2018.
When
it
sold
25
million
shares
in

2019,
at
the
height
of
the
company’s
troubles,
the
stock
fell
4%
in
response
to
the
disclosure.
In
2022,
it
distributed
about
7%
of
Kraft
Heinz
to
investors
in
its
fund,
which

reportedly
included
tennis
star
Roger
Federer.

Last
year,
Kraft
Heinz
tapped
Carlos
Abrams-Rivera
as
its
new
chief
executive.
While
he’s
been
with
the
company
since
2020,
he’s
notably
the
company’s
first
CEO
without
ties
to
3G.