Buffett faults J&J's use of stock in Synthes deal
OMAHA, Neb., April 30 |
OMAHA, Neb., April 30 (Reuters) - Warren Buffett criticized Johnson & Johnson (JNJ.N), a large investment for his company Berkshire Hathaway Inc (BRKa.N) (BRKb.N), for using too much of its own stock in a planned $21.7 billion takeover of Swiss medical devices maker Synthes Inc SYST.VX.
Speaking on Saturday at Berkshire's annual meeting in Omaha, Nebraska, Buffett said he would like the acquisition more if Johnson & Johnson used only cash to make it. He said the stock component suggested that Johnson & Johnson management was undervaluing its own shares.
The comments recall Buffett's criticism last year of Kraft Foods Inc KFT.N, another large Berkshire holding, for using its own stock to fund a takeover of British chocolate maker Cadbury Plc, and sell a pizza business to Nestle SA (NESN.VX).
"I would have voted to keep my pizza and not do Cadbury," Buffett said at last year's Berkshire meeting.
Berkshire said it ended 2010 with a roughly $2.79 billion investment in Johnson & Johnson common stock. (Reporting by Jonathan Stempel in New York)
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